Supreme Court Adjourns Decision on Pension Eligibility: Karan Singh vs. Delhi Transport Corporation (2017)

Date of the Judgment: 13 September 2017

Citation: Civil Appeal No.12743 of 2017 (arising out of SLP(C)No.18321 of 2016)

Judges: Hon’ble Mr. Justice A.K. Sikri and Hon’ble Mr. Justice Ashok Bhushan

Can a period of training and leave without pay be included in the calculation of qualifying service for pension benefits? The Supreme Court of India is currently considering this question in a case involving a former employee of the Delhi Transport Corporation (DTC). The core issue revolves around whether the appellant’s service, when calculated, meets the minimum qualifying period for pension eligibility, considering his training period and leave without pay. The bench comprises Hon’ble Mr. Justice A.K. Sikri and Hon’ble Mr. Justice Ashok Bhushan.

Case Background

The appellant, Karan Singh, was initially directed to report for training as a Retainer Crew or Conductor on 10 February 1983. He underwent training from 15 March 1983 to 26 May 1983. Following a written test, he was appointed as a Conductor, effective from 27 May 1983. He was given a regular appointment as a monthly rate Conductor from 27 November 1983. The Delhi Transport Corporation (DTC) introduced a voluntary retirement scheme (VRS) on 3 March 1993, allowing employees with 10 years of service and 40 years of age to opt for retirement. Karan Singh applied for voluntary retirement, which was accepted on 30 April 1993. He received payments as per the scheme, but his pension was not sanctioned.

Karan Singh filed a writ petition in the Delhi High Court seeking pension benefits, which was later transferred to the Central Administrative Tribunal. The Tribunal initially ruled in his favor, stating that since DTC had accepted his voluntary retirement based on his completion of 10 years of service, it was too late to deny him pension. However, the Delhi High Court overturned this decision, calculating his service as 9 years, 7 months, and 8 days, which did not qualify him for pension. A review application to include his training period was rejected. Subsequently, Karan Singh again requested DTC to reconsider his case, also claiming that he was not paid his share of the contribution to the Provident Fund.

DTC informed him on 3 October 2013, that his qualifying service was less than 10 years. Karan Singh then filed an original application before the Tribunal, which ruled in his favor on 19 February 2015, stating that his training period should be included, and he should be granted pension with interest. The Delhi High Court again overturned the Tribunal’s order on 15 March 2016, citing its earlier judgment and the principle of constructive res judicata, as well as the Supreme Court’s judgment in DTC vs. Lillu Ram, which held that leave without pay cannot be counted as qualifying service for pension.

Timeline:

Course of Proceedings

The appellant initially approached the Delhi High Court seeking a direction for the payment of pension. This writ petition was transferred to the Central Administrative Tribunal, which allowed the petition on 9 August 2011. The Tribunal held that since the respondent had accepted the voluntary retirement of the appellant on the ground that he had completed 10 years of service, it was not open for the Corporation to deny pension on the ground that he had not completed 10 years of qualifying service. The Corporation challenged this order in the High Court, which was allowed on 29 May 2013. The High Court held that the service of the appellant, when reckoned from 27 May 1983, and after deducting 98 days of leave without pay, amounted to 9 years, 7 months, and 8 days, which did not qualify for pension.

The appellant filed a review application seeking to add the period of training from 15 March 1983 to 26 May 1983, which was rejected. Subsequently, the appellant again requested the DTC to re-appreciate the qualifying service and reconsider the grant of pension. He also claimed that he was not paid the employee’s share of the contribution to the Provident Fund. In response, the Corporation informed him on 3 October 2013 that his qualifying service was less than 10 years. The appellant then filed an original application before the Tribunal, which was allowed on 19 February 2015. The Tribunal held that by adding the training period, the appellant completed 9 years, 10 months, and 11 days, which could be rounded off to 10 years. The DTC challenged this order in the Delhi High Court, which was allowed on 15 March 2016. The High Court relied on its earlier judgment dated 29 May 2013 and the principle of constructive res judicata, as well as the Supreme Court’s judgment in DTC vs. Lillu Ram.

Legal Framework

The case primarily revolves around the interpretation of service rules concerning the calculation of qualifying service for pension benefits. The Central Civil Services (Pension) Rules, 1972, particularly Rules 21, 27, and 28, are relevant. Rule 21 deals with the commencement of qualifying service. Rule 27 and 28 pertain to the counting of periods spent on leave and the condonation of interruptions in service.

The Supreme Court also noted that the judgment of the two-judge bench in DTC vs. Lillu Ram was referred for consideration by a larger bench. The two-judge bench observed that the judgment in Lillu Ram did not consider the relevant rules such as Rules 27 and 28 of the Central Civil Service (Pension) Rules, 1972, or F.R.17-A of the Fundamental Rules. The bench also noted that no adverse effect can be permitted upon the right of the employee to receive pension unless he was given notice that his absence will be treated as unauthorized absence and will not be counted towards qualifying service for pension.

Arguments

Appellant’s Submissions:

• The appellant contended that the period of training from 15 March 1983 to 26 May 1983 should be included in the calculation of qualifying service for pension.
• The appellant argued that the leave without pay for 98 days should not be treated as a break in service unless there was a specific order to that effect, and he drew attention to Rules 21, 27, and 28 of the Pension Rules.
• The appellant also referred to a letter dated 21 October 2013, obtained under the Right to Information Act, 2005, which indicated that many employees who had not completed 10 years of qualifying service but had opted for VRS were granted pension, as per the orders of the High Court or the Supreme Court.

Respondent’s Submissions:

• The respondent argued that the training period from 15 March 1983 to 26 May 1983 cannot be added to the qualifying service because the appellant was appointed as a conductor on a regular basis from 27 November 1983.
• The respondent contended that the period of leave without pay for 98 days, during which no salary was paid, cannot be counted as qualifying service, referring to Rule 21 of the CCS Pension Rules.
• The respondent stated that the training period cannot be included as no salary or stipend was paid during that time, and appointment is offered only after passing a written test conducted after the training.
• The respondent also brought on record an order of the Supreme Court in D.T.C. vs. Balwan Singh & Ors., where the court referred the judgment in Lillu Ram for consideration by a larger bench.

The innovativeness of the argument lies in the appellant’s reliance on the RTI information to argue that similarly situated persons have been granted pension, which challenges the respondent’s stance on the strict interpretation of the qualifying service rules.

Submissions Table

Issues Framed by the Supreme Court

The Supreme Court did not explicitly frame issues in this judgment. However, the core issue before the Court was whether the appellant’s service, when calculated, meets the minimum qualifying period for pension eligibility, considering his training period and leave without pay.

Treatment of the Issue by the Court

The following table demonstrates as to how the Court decided the issues

Authorities

Cases:

• DTC vs. Lillu Ram in C.A. No.11440 9 of 2011, Supreme Court of India: This case held that the period of leave without pay cannot be counted as qualifying service for pension. This judgment was referred for consideration by a larger bench.
• D.T.C. vs. Balwan Singh & Ors. in C.A.No.7159 of 2014, Supreme Court of India: This case referred the judgment in Lillu Ram for consideration by a larger bench.

Legal Provisions:

• Rule 21 of CCS Pension Rules: This rule deals with the commencement of qualifying service.
• Rule 27 of CCS Pension Rules: This rule pertains to the counting of periods spent on leave.
• Rule 28 of CCS Pension Rules: This rule pertains to the condonation of interruptions in service.
• F.R.17-A of the Fundamental Rules: This rule was also mentioned in the reference order in D.T.C. vs. Balwan Singh & Ors. as a rule that was not considered in Lillu Ram.

Authorities Considered by the Court

Judgment

How each submission made by the Parties was treated by the Court?

How each authority was viewed by the Court?

• The Supreme Court referred the judgment in DTC vs. Lillu Ram [C.A. No.11440 9 of 2011]* for consideration by a larger bench, noting that it did not consider relevant rules. The Court decided to wait for the decision in the reference made in C.A. No. 7159 of 2014.
• The Supreme Court noted that the judgment in D.T.C. vs. Balwan Singh & Ors. [C.A.No.7159 of 2014]* referred the judgment in Lillu Ram for consideration by a larger bench.

What weighed in the mind of the Court?

The Supreme Court’s decision to adjourn the matter indicates a careful consideration of the issues at hand. The Court acknowledged the appellant’s plea for adding the training period and for not treating the leave without pay as a disruption in service. The Court also recognized the need to await the decision on the reference made in C.A. No. 7159 of 2014, which involves similar questions of law. The Court’s emphasis on the need to consider Rules 27 and 28 of the CCS Pension Rules shows a focus on ensuring that the correct legal provisions are applied.

Fact:Law Ratio

The Court’s reasoning is more focused on the legal aspects, particularly the interpretation of the pension rules and the need to await the decision of the larger bench on the reference made in C.A. No. 7159 of 2014. This shows that the legal considerations weighed more heavily in the mind of the Court.

The Court did not make a final decision on the issue but decided to wait for the decision in the reference made in C.A. No. 7159 of 2014. This shows that the Court was not prepared to make a decision on the issue without considering the decision of the larger bench.

Key Takeaways

• The Supreme Court has not yet decided on the issue of whether training periods and leave without pay should be included in the calculation of qualifying service for pension benefits.
• The Court has acknowledged the need to consider the relevant rules of the CCS Pension Rules, particularly Rules 21, 27, and 28.
• The matter has been adjourned to await the decision on the reference made in C.A. No. 7159 of 2014, which involves similar legal questions.
• The outcome of this case will have significant implications for employees seeking pension benefits, particularly those who have undergone training or have taken leave without pay.

Directions

The Supreme Court directed that the matter be listed after the decision in the reference made in C.A. No. 7159 of 2014.

Specific Amendments Analysis

There were no specific amendments discussed in this judgment.

Development of Law

The ratio decidendi of this case is that the Supreme Court has adjourned the matter to await the decision on the reference made in C.A. No. 7159 of 2014, which involves similar legal questions. The Court has not made any final decision on the issue of whether training periods and leave without pay should be included in the calculation of qualifying service for pension benefits. However, the court has indicated that the relevant rules of the CCS Pension Rules, particularly Rules 21, 27, and 28, need to be considered. This case highlights the need for clarity in the interpretation of pension rules and the importance of considering all relevant legal provisions. The Supreme Court has not changed the previous position of law but has indicated that the previous position of law as laid down in DTC vs. Lillu Ram needs to be reconsidered by a larger bench.

Conclusion

In Karan Singh vs. Delhi Transport Corporation & Anr., the Supreme Court has adjourned the matter to await the decision on the reference made in C.A. No. 7159 of 2014. The core issue revolves around whether the appellant’s training period and leave without pay should be included in the calculation of qualifying service for pension benefits. The Court has acknowledged the need to consider the relevant rules of the CCS Pension Rules and the need to await the decision of the larger bench on the reference made in C.A. No. 7159 of 2014. The outcome of this case will have significant implications for employees seeking pension benefits, particularly those who have undergone training or have taken leave without pay.