Whether an employee can be denied pension due to unauthorised absence?

IN THE SUPREME COURT OF INDIA

C.A. No. 11440/2011 (Arising out of SLP (C) No. 12165/2011)

Decided On: 14.12.2011

Delhi transport corporation
Vs.
Lillu Ram

Hon’ble Judges/Coram:Deepak Verma and K.S. Panicker Radhakrishnan, JJ.
Citation:(2017) 11 SCC 407

1. Leave granted. Feeling aggrieved and dissatisfied with the judgment and order passed by Division Bench of the High Court of Delhi at New Delhi in Appellant’s Letters Patent Appeal (LPA) No. 2679 of 2005, decided on 13.5.2010, Appellant is before us challenging the same on variety of grounds.

2. The Appellant preferred the LPA against the judgment and order passed by learned Single Judge of the High Court of Delhi in Respondent’s Writ Petition (C) No. 2962 of 2001 decided on 23.8.2005, whereby and whereunder Respondent/employee of the Appellant has been held to be entitled for pensionary benefits.

3. The Respondent, an erstwhile employee of Appellant, claimed pensionary benefits to be granted to him under the provisions of Central Civil Service (Pension) Rules, 1972 (hereinafter shall be referred to as ‘Pension Rules’).

4. Learned Single Judge, after considering the Respondent’s Writ Petition, came to the conclusion that he would be entitled to receive the pension in accordance with Pension Rules and air-arrears of pension from the date of filing the Writ Petition should be paid to him. This order was subject matter of challenge before the Division Bench of the High Court by filing LPA. Since it has also been dismissed, the employer – Delhi Transport Corporation (hereinafter shall be referred to as ‘DTC’) is before us in Appeal.

5. Thumbnail sketch of the facts of the case are as follows:

6. Respondent was engaged as a Driver with the Appellant with effect from 13.4.1983. Appellant floated a Scheme known as Voluntary Retirement Scheme (for short ‘V.R.S.’). Since Respondent had completed 10 years of service with D.T.C., he applied for voluntary retirement under it.

7. It is also the case of the Respondent that when the Pension Scheme was introduced by DTC, he had exercised the option as required under Clause (9) of the said Pension Scheme and had, therefore, become entitled to receive pension under the Pension Scheme.

8. Since Respondent had already completed 10 years of service and 40 years of age as well, for being qualified to be considered for V.R.S., the same was accepted by the Appellant. The eligibility criteria which finds place in Clause (2) of the V.R.S. is reproduced hereinbelow:

“2. Eligibility: An employee must have completed ten years of service in this Corporation or completed 40 years of age to qualify for consideration under the Scheme. For this purpose, period of deputation/retention of lien in the parent office in lieu of deputation prior to absorption in the regular service of the Corporation will be excluded.”

9. V.R.S. further postulates that it will be applicable to all regular employees of DTC that is to say workers and Executives who were appointed against regular vacancies in the Corporation.

10. Sub-clause (b) of Clause (3) mentions that voluntary retirement cannot be claimed by any employee as a matter of right. The Corporation will have the right not to grant voluntary retirement for the reasons to be recorded in writing.

11. In the case in hand, it is not in dispute that Respondent had completed 10 years of service and had crossed the age of 40 years. Thus, D.T.C., in its wisdom, thought it fit to grant him the benefit of VRS. Subsequent thereto, whatever amounts were found due and payable to him, were paid accordingly. But pension, which according to the Respondent, he was entitled to, having not been paid, he approached the Appellant. Since Appellant refused to grant him pensionary benefits, Respondent was constrained to file a Writ Petition, purportedly Under Articles 226 and 227 of the Constitution of India, before learned Single Judge of the High Court at New Delhi.

12. On notice being served upon the D.T.C., it filed its Return/Counter Affidavit mentioning therein that no doubt it is true that Respondent had rendered 10 years of service and had also crossed the age of 40 years, thus, was granted V.R.S. but he would not be entitled to pensionary benefits as he had not completed 10 years of qualifying service as required under Rule 3(1)(q) of Pension Rules. According to the Appellant, Respondent had remained absent from duty unauthorizedly for 486 days. On deduction of 486 days from 10 years of service, he would be short of 10 years of qualifying service.

13. According to Appellant, two different things were required to be fulfilled by Respondent for acceptance of V.R.S. and then for grant of pensionary benefits. One was completion of 10 years of service or 40 years of age for being entitled to claim VRS but for the purposes of claiming pensionary benefits, Respondent must have completed 10 years of qualifying service, which he had not completed.

14. According to Appellant, since he did not fulfill the eligibility criteria of qualifying service, the prayer of the Respondent for grant of pension has been rejected.

15. However, this distinction was sought to be projected by the Appellant before learned Single Judge and then before the Division Bench in its LPA, but it did not appeal to them, who rejected its contentions. In fact, learned Single Judge and then Division Bench both proceeded on assumption that once the Respondent’s V.R.S. has been accepted, then automatically he would be entitled to the pensionary benefits as well.

16. Unfortunately, they failed to draw a line between acceptance of V.R.S. and grant of Pension which is governed under the Statutory Rules.

17. For better appreciation with regard to grant of pension, it is necessary to quote the definition of qualifying service which finds place in Rule 3(1)(q) of the Pension Rules, which reads as under:

“3(1)(q). ‘Qualifying service’ means service rendered while on duty or otherwise which shall be taken into account for the purpose of pensions and gratuities admissible under these Rules.”

18. There is no dispute before us that these Rules had already been adopted by DTC, a fact which stands fortified by an earlier judgment dated 16.3.2000 passed in LPA No. 33 of 1998 by Division Bench of the High Court of Delhi. The relevant portion of the said judgment is reproduced hereinbelow:

“In order to appreciate respected submissions of learned Counsel for the parties, it will be but appropriate to make reference to the relevant CCS (Pension) Rules. As per Office Order No. 16 dated 27.11.1992 introduction of the pension scheme for employees of D.T.C. was sanctioned by the Central Government on the same pattern as for the Central Government employees, subject to the conditions contained therein.”

19. Against this judgment, a Special Leave Petition was preferred before this Court, which came to be disposed of on other issues but this aspect of the matter was not touched upon. Thus, it is clear that the aforesaid Pension Rules are applicable to the employees of Appellant as well.

20. When the matter was being heard, we had some doubt in our mind with regard to actual absence of the Respondent during the period of 10 years of service, rendered with the Appellant. Thus, to satisfy ourselves, we had asked the learned Counsel for Appellant to produce before us the original Service Book of the Respondent. We have gone through the same ourselves and find that he had remained absent from duty without leave unauthorisedly for a total period of 486 days out of total 10 years of service with D.T.C. His service record further reflects that he was issued three warnings and one censure from time to time for remaining absent from duty unauthorisedly. But there was no improvement in the performance of the Respondent. If the aforesaid period of 486 days is deducted from the period of 10 years that he had worked with the Appellant then his actual working days would be reduced to 8 years 3 months and 17 days. If that be so, then as per the definition of ‘qualifying service’ under Clause 3(1)(q) of the Pension Rules, he has certainly not rendered service while on duty or otherwise for a period of 10 years to become entitled for pensionary benefits.

21. The minimum qualifying service which is required for earning pensionary benefits finds place in Rule 49 of the Pension Rules. For the sake of convenience, Rule 49 is reproduced hereinbelow:

“49. Amount of pension.-(1) In the case of a government servant retiring in accordance with the provisions of these Rules before completing qualifying service of ten years, the amount of service gratuity shall be calculated at the rate of half month’s emoluments for every completed six-monthly period of qualifying service.

(2) to (4). x x x x x N.A.

(5) & (6). x x x x x.”

22. Thus, looking to the matter from all angles, we are of the considered opinion that even though Respondent had completed 10 years of service for being entitled to claim VRS but he had certainly not become entitled to claim pensionary benefits as he had not put in qualifying service of 10 years with the Appellant.

23. Conjoint reading of Rule 3(1)(q) and Rule 49 of the Pension Rules quoted hereinabove, make it abundantly clear that only those employees would become entitled to pensionary benefits, who had put in 10 years of qualifying service.

24. Looking to the facts of this case, where Respondent/employee had remained absent, without any sanction unauthorisedly for a long period of 486 days during the period of 10 years of service, he had put in with the Appellant, he would fall short of completing 10 years of qualifying service.

25. As mentioned hereinabove, there are two different things – one with regard to grant of VRS and another with regard to entitlement for pensionary benefits. First one is governed under the VRS whereas the second one is governed under the Statutory Rules. Merely because his application for voluntary retirement was accepted, automatically, he would not become entitled for grant of pensionary benefits.

26. In fact, similar question had cropped up for consideration before this Court on two different occasions and this Court held so in the first judgment reported in Union of India and Anr. v. Bashirbhai R. Khiliji MANU/SC/7666/2007 : (2007) 6 SCC 16, wherein same Rules 3(1)(q) and 49 have been dealt with elaborately. We may profitably reproduce the relevant paras thereof for clarity:

“We are presently concerned with two provisions of the Rules i.e. Rule 38 and Rule 49. Rule 38, as reproduced above, contemplates the invalid pension. The procedure has been mentioned therein i.e. in case an incumbent retires from service on account of bodily or mental infirmity which permanently incapacitated him for the service, then a medical certificate of incapacity shall be given by the authorities concerned and in particular Form 23 the same may be applied before the competent authority/It is true that the qualifying service is not mentioned in Rule 38 but Rule 49 which deals with the amount of pension stipulates that a government servant retiring in accordance with the provisions of these Rules before completing qualifying service of ten years, the amount of service gratuity shall be calculated at the rate of half month’s emoluments for every completed six-monthly period of qualifying service. Therefore, the minimum qualifying of ten years is mentioned in Rule 49. The word ‘qualifying service’ has been defined in Rule 3(1)(q) of the Rules which reads as under:

“3(1)(q). ‘Qualifying service’ means service rendered while on duty or otherwise which shall be taken into account for the purpose of pensions and gratuities admissible under these Rules.”

Therefore, the minimum qualifying service which is required for the pension as mentioned in Rule 49, is ten years. The qualifying service has been explained in various memos issued by the Government of India from time to time. But Rule 49 read with Rule 38 makes it clear that qualifying service of pension is ten years and therefore, gratuity is determined after completion of qualifying service often years. Therefore, for grant of any kind of pension one has to put in the minimum often years of qualifying service. The Respondent in the present case, does not have the minimum qualifying service. Therefore, the authorities declined to grant him the invalid pension. But the amount of gratuity has been determined and the same was paid to him.”

27. This case was specifically dealing with the same Pension Rules which are applicable in the case in hand. Subsequently, in yet another judgment of this Court reported in United Bank of India v. Pijush Kanti Nandy and Ors. MANU/SC/1467/2009 : (2009) 8 SCC 605, similar Pension Rules with regard to an employee of the Bank were considered, it has been found that qualifying service would be the actual service put in by the employee. Para 26 of the said judgment relevant for the present case is reproduced hereinbelow:

“26. Definition of qualifying service’ is restrictive in nature. It uses the word ‘means’ and not ‘includes’ or ‘means and includes’. Thus, the construction of ‘qualifying service’ must ordinarily be kept confined to the service rendered while on duty. He may be in service even otherwise although not rendering any duty. Those exigencies of situation are covered by the other types of cases which would come within the purview thereof. A person who is not in service cannot be said to be entitled to the benefit thereof. The term ‘otherwise’ should be read ejusdem generis. The term ‘otherwise’ in the context of ‘the Regulations’ should be construed so that it can become a meaningful one. For the said purpose, the employee concerned was required to be in service. It is not possible to hold in absence of any express words that the eligibility criteria laid down in the Regulations for obtaining the benefit of pension i.e. the qualifying service should be construed in such a manner thai a person even not in service would be deemed to be in service. The statute does not raise a legal fiction. A strict construction of the term ‘qualifying service’ therefore, in our opinion, would not be appropriate.”

28. Thus, we are fortified in our view that Respondent was not entitled to pensionary benefits, even though he had become entitled for voluntary retirement only.

29. In the light of the foregoing discussions, we hereby set aside and quash the impugned orders passed by learned Single Judge as well as of the Division Bench affirming the order of learned Single Judge in Letters Patent Appeal. The appeal stands allowed to this extent.

30. In case other benefits for which Respondent has been found entitled to, have not been paid so far then the same shall be paid to him within a period of six weeks positively from today. Parties to bear their respective costs.

Leave a Comment

Your email address will not be published. Required fields are marked *