'Pension Scheme Must Be Interpreted Widely' : Supreme Court Allows Central Govt Service To Be Included For Pension Of Gujarat Govt Employee

“Accordingly, in our considered opinion, the raison d'etre qua the grant of pension by the State Government would inextricably be linked to a concentrated effort by the State Government to enable its former employee(s) to tide over the vagaries and vicissitudes associated with old age vide a pension scheme.,” the Division Bench of Justices Vikram Nath and Satish Chandra Sharma added.

In the instant case, the Appellant was a government employee. Initially, he worked for the central government as a Postal Assistant in the Gandhinagar Postal Division. During his employment, he was selected for the post of Senior Assistant in the Ministry of Health and Medical Services, Government of Gujarat. Pertinently, the Appellant had also obtained a No-Objection Certificate to participate in the selection process. Thus, after working for around ten years as a postal assistant, the Appellant resigned to join the latter post. It may also be noted that from 18.08.1993, the Appellant worked as a Senior Assistant for 23 years.

The dispute arose when the State government paid the Appellant only for his job as a Senior Assistant, not a Postal Assistant. When this action was challenged before the High Court, the same came to be dismissed. Thus, the present appeal.

Before moving forward, it is important to note Rule 25(ix) of the above-mentioned Pension Rules. As per it, the qualifying service of a Government employee includes – “services rendered under Central Government/Central Government Autonomous bodies having pension scheme, by a Government employee who is absorbed in Government.”

Based on this, the Appellant argued that the state government absorbed him after working for the central government. Thus, he must get pensionary benefits as outlined in the above rule. Per contra, the Respondent State contended that the Appellant was not entitled to seek the benefit of the Pension Rules.

After perusing the concerned rule, the Court noted that the Appellant, a former central government employee, would be entitled to the benefit if (i) the employment had an underlying pension scheme and (ii) the State Government absorbed him.

Taking a cue from this, the Court observed that the Appellant's prior employment undisputedly had a pension scheme. On the issue of whether the State Government absorbed the Appellant, the Court observed that the interpretation given to the pension scheme should not be narrow and restrictive.

“It is well settled that pension scheme(s) floated by the State Government form a part of delegated beneficial legislation; and ought to be interpreted widely subject to such interpretation not running contrary to the express provisions of the Pension Rules. Furthermore, it would be relevant to underscore that the State Government is a model employer; and ought to uphold principles of fairness and clarity.,” the Court explained.

In view of these observations, the Court concluded that the State Government implicitly absorbed the Appellant. The Court rested its reasoning on the fact that the NOC was given to the Appellant before the selection process. Having been selected, he resigned and joined the post under the State government.

“We thus find that the High Court erred in its interpretation of Rule 25(ix) of the Pension Rules; and consequently, unfairly deprived the Appellant from seeking inclusion of the period of service rendered to the Central Government as a part of 'qualifying service' under the Pension Rules.,” the Court held.

Thus, the Court directed the State to re-calculate the pensionary benefits and disburse the arrears (if any) accordingly.

Headnotes

Gujarat Civil Services (Pension) Rules, 2022; Rule 25 - Qualifying service of a government employee - Qualifying service for the purpose of calculating terminal benefits / pensionary benefits under the Pension Rules would include prior services rendered by such person under inter alia the Central Government provided that (i) the employment of such person under the Central Government encompassed an underlying pension scheme; and (ii) such person came to be absorbed by the State Government. The Appellant has most certainly, 'implicitly' been absorbed by the State Government i.e., the Appellants' participation in the selection process was prefaced by an NOC from the Central Government; and subsequently was followed by the tender of a technical resignation to the Central Government upon securing employment with the State Government. The interpretation sought to limit the benefit of Rule 25(ix) only to such person(s) who may have 'explicitly' been absorbed by the State Government is narrow and restrictive. (Para 14 & 18)

Pension – Objective - Pension is earned by a government servant in lieu of tireless service rendered by him / her during the course of their employment; and often is an important consideration for person(s) seeking government employment. The raison d'etre qua the grant of pension by the State Government would inextricably be linked to a concentrated effort by the State Government to enable its former employee(s) to tide over the vagaries and vicissitudes associated with old age vide a pension scheme. (Para 10)

Delegated Beneficial legislation - Pension scheme(s) floated by the State Government form a part of delegated beneficial legislation; and ought to be interpreted widely subject to such interpretation not running contrary to the express provisions of the Pension Rules. (Para 17)

Senior Divisional Manager, LIC v. Shree Lal Meena, (2019) 4 SCC 479; referred.

Citation : 2024 LiveLaw (SC) 108

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