New Delhi: The Supreme Court has dismissed an appeal by the Punjab School Education Board against a Punjab and Haryana High Court judgment, holding that the pre-regularization service of employees who were subsequently regularized must be counted as qualifying service for pension, entitling them to be treated as having entered Government service prior to 01.01.2004 and thus outside the new Defined Contributory Pension Scheme.
A Bench comprising Justices Prashant Kumar Mishra and Shree Chandrashekhar was hearing an appeal filed by the Punjab School Education Board against the judgment passed by the Division Bench of the Punjab and Haryana High Court, which had upheld a Single Judge's ruling in favour of the respondent-employees.
The respondent-employees, engaged as Clerks and Peons between 1993 and 1996 on a contract/ad-hoc/daily-wage/work-charge basis, went through several rounds of litigation over the years concerning their claim for regularization. Pursuant to a Government policy dated 23.01.2001 for regularizing work-charged and daily-wage employees, a Committee constituted by the Board recommended adopting the policy mutatis mutandis as a one-time humanitarian measure, which the Board accepted on 13.07.2004. Appointment letters were issued to the employees from August 2004 onward. After regularization, when the employees sought pension under the old scheme, the Board referred the matter to the State Government, which declined the request on 09.12.2011, holding that the employees were governed by the Defined Contributory Pension Scheme introduced with effect from 01.01.2004.
The Supreme Court held that the substance of the employees' engagement, rather than the mere nomenclature used in their appointment letters, had to prevail, and that the Board's own conduct including its Committee's recommendation, its resolution dated 13.07.2004, and its subsequent letter to the State Government dated 20.10.2011 acknowledging that the employees had been regularized left no doubt that the engagement amounted to regularization. The Court rejected the Board's plea of res judicata based on earlier rounds of litigation, holding that those proceedings concerned only the claim for regularization, while the present dispute concerned the distinct question of pensionary consequences flowing from it.
Relying on its earlier decision in D.S. Nakara & Others v. Union of India, the Court reiterated that pension is not a bounty but a deferred wage for past service rendered, and that denial of pensionary benefits on technical grounds to an employee who has rendered long, continuous service and stands ultimately regularized is generally unjustified. It also relied upon the High Court's decision in Harbans Lal v. State of Punjab & Others, which had similarly held that daily-wage service rendered before regularization must be counted as qualifying service where such service commenced prior to 01.01.2004. The Court held that the “breaks in service were either ‘notional’ or artificial/administrative breaks” and had to be ignored, treating the respondents' service as continuous.
The Court concluded that the respondent-employees were entitled to be treated as having entered Government service prior to 01.01.2004, placing them under Tier II of the Defined Contributory Pension Scheme with the discretion to opt for either the old GPF pension scheme or the new scheme.
The Appeal was accordingly dismissed, with no order as to costs.
Case Title: Punjab School Education Board and Another vs. Satnam Singh and Others, Civil Appeal No. 6865 of 2022
