Supreme Court Allows Pension Benefits for Absorbed Electricity Board Employees: Vijay Kumar Joshi vs. Akash Tripathi (2025)

Introduction

Date of the Judgment: May 13, 2025

Judges: Vikram Nath, J., Prasanna B. Varale, J.

Do employees of cooperative societies, after being absorbed into the Madhya Pradesh State Electricity Board (MPSEB), qualify for pension benefits? The Supreme Court of India addressed this critical question in the case of Vijay Kumar Joshi vs. Akash Tripathi. This judgment clarifies the rights of employees from financially struggling cooperative societies who were merged into the MPSEB in 1995. The bench, comprising Justice Vikram Nath and Justice Prasanna B. Varale, delivered a unanimous decision to ensure equitable treatment for these employees.

Case Background

In the State of Madhya Pradesh, numerous Co-operative Societies were involved in electricity distribution. By 1995, many faced financial difficulties, leading to a policy decision to merge them with the MPSEB. This merger aimed to secure the employment of both regular employees and daily wagers.

The actual merger occurred in 2002, effective from March 15, 2002, and was formalized through MPSEB orders dated May 18, 2004, and December 14, 2004. The terms and conditions for absorption were defined by the MPSEB in an order dated June 5, 2004. These terms stipulated that regular employees would be taken over under the same conditions as in the Society, without deputation allowance, maintaining their existing pay scales and designations. Pension and gratuity would be admissible as per the rules of the concerned society.

Timeline

Course of Proceedings

Initially, Bijli Karamchari Sangh (BKS) filed a Writ Petition (W.P.(S)No.1151 of 2005) challenging orders related to the merger and absorption, seeking benefits equal to those of MPSEB employees. Subsequently, Panchraj Tiwari filed another petition (Writ Petition No.1962 of 2010), which was eventually appealed to the Supreme Court and decided in 2014, deeming certain clauses of the absorption terms unsustainable.

The BKS writ petition was decided on March 7, 2015, directing that absorbed employees be treated equally with MPSEB employees regarding regular pension benefits. This decision was challenged by the MPSEB in Writ Appeal No.334 of 2015, which was dismissed on June 14, 2016. The MPSEB’s subsequent Special Leave Petition was dismissed on November 30, 2018, and a review petition was also dismissed on April 23, 2019.

Multiple proceedings were initiated by individuals regarding promotion, pay fixation, and applicability of the 6th Pay Commission. A Single Judge disposed of these petitions on April 3, 2019, directing that petitioners be entitled to pensionary benefits as per the judgment in Writ Appeal No. 334/2015. This led to the MPSEB filing a series of Writ Appeals, with the Division Bench disagreeing with the earlier judgment and referring the matter to a larger bench on June 27, 2019.

Legal Framework

The Supreme Court considered the following legal provisions:

• Rule 3(p) of the Madhya Pradesh Civil Services (Pension) Rules: Defines ‘Qualifying service’ as “the period between the date of joining pensionable service under the State Government and retirement therefrom which shall be taken into account for purpose of the pension and gratuity admissible under these rules and includes the period which qualifies under any other order or rule for the time being in force.”
• Rule 12(2) of the Madhya Pradesh Civil Services (Pension) Rules: States that “Subject to the provisions of these rules, qualifying service of a Government servant shall commence fr6m the date he takes charge of the post to which he is first appointed either substantively or in an officiating or temporary capacity.”
• Rule 13(1): States that “The service of a Government servant shall not qualify unless his duties and pay are regulated by the Government, or under conditions determined by the Government.”

Arguments

The primary issue in these appeals is whether employees of the Societies, after being absorbed into the MPSEB, are entitled to pension benefits, and if so, whether the service rendered in the Society should be counted towards the qualifying period for pension calculation.

Arguments for the Employees:

• The employees argued that once absorbed into the MPSEB, they should be treated on par with other MPSEB employees, as per the principle established in Panchraj Tiwari vs. Madhya Pradesh State Electricity Board and Others [(2014) 5 SCC 101].
• They contended that denying them pension benefits solely based on their origin in the Societies would amount to unjust discrimination.
• The employees relied on the judgment in the case of BKS, where relief had already been partially granted, arguing that there cannot be two classes of employees in the same organization, one with pension and the other without.

Arguments for the MPSEB:

• The MPSEB argued that the terms of absorption, as formulated in its order dated June 5, 2004, stipulated that pension/gratuity would be payable as per the rules/regulations of the concerned society.
• They contended that the service rendered in the Society prior to absorption could not be counted towards the qualifying period for pension, as such service was not under the State Government and was not governed by its rules.

Arguments Table

Issues Framed by the Supreme Court

The Supreme Court addressed the following issue:

1. Whether the employees of the Societies who were absorbed with the MPSEB are entitled to pension, and if so, whether the service rendered in the Society would also be counted for determining the qualifying period for calculation of pension, or only the service rendered after absorption in the MPSEB would be counted.

Treatment of the Issue by the Court

Authorities

The court relied on the following authorities:

• Panchraj Tiwari vs. Madhya Pradesh State Electricity Board and Others [(2014) 5 SCC 101] (Supreme Court of India): Recognized that upon merger or absorption, the original identity of the service ceases to exist and complete functional integration must follow.
• M.P.Poorva Kshetra Vidyut Vitaran Co. Ltd v. Uma Shankar Dwivedi (Civil Appeal No. 9146 -9148 of 2018) (Supreme Court of India): Relaxed the terms of absorption, stating that the State had no objection in granting benefits similar to employees of MPSEB from the date of absorption.
• Brajendra Singh Kushwah & Ors v. M.P. State Electricity Board and Ors. (SLP (Civil) No.28516 of 2013) (Supreme Court of India): Based upon the judgment in the case of Panchraj Tiwari (supra), directing the respondent-Board to grant the entire benefits to the petitioners at par with the employees of the Answering Respondents in the matter of pay scale, dearness allowance and other fringe benefits.
• Rule 3(p) of the Madhya Pradesh Civil Services (Pension) Rules: Defined ‘Qualifying service’.
• Rule 12(2) of the Madhya Pradesh Civil Services (Pension) Rules: Stated when qualifying service commences.
• Rule 13(1): Laid down conditions subject to which service qualifies.

Authorities Table

Judgment

The Supreme Court allowed the appeals in part, holding that the appellants shall be paid pension by the MPSEB with effect from their respective dates of absorption. The Court clarified that while the employees are entitled to pension, the period of service rendered in the Society prior to absorption cannot be counted towards the qualifying period for pension.

Treatment of Submissions Table

Treatment of Authorities Table

What Weighed in the Mind of the Court?

The Supreme Court’s decision was primarily influenced by the need to ensure equitable treatment and avoid unjust discrimination among employees performing the same duties. The Court emphasized that denying pension benefits to absorbed employees solely based on their origin in the Societies would create an unacceptable disparity. The existing partial relief granted in the BKS case also weighed heavily on the Court’s decision.

The Court’s reasoning was a blend of factual considerations (such as the employees performing the same duties) and legal principles (such as the need to avoid discrimination). The factual aspects of the case held a slightly higher weightage in the Court’s decision-making process.

Logical Reasoning

Key Takeaways

• Employees of cooperative societies absorbed into the MPSEB are entitled to pension benefits.
• The qualifying period for pension calculation will be counted from the date of absorption into the MPSEB, not from the date of joining the Society.
• This judgment ensures equitable treatment and avoids unjust discrimination among employees performing the same duties.

Directions

The Supreme Court directed the respondents to implement the directions within a period of four months from today and pay all the arrears of pension within the same time.

Development of Law

The ratio decidendi of the case is that employees absorbed into the MPSEB are entitled to pension benefits from the date of their absorption, ensuring equitable treatment and avoiding unjust discrimination. This clarifies the application of pension rules in cases of merger and absorption, providing a consistent legal position for similarly situated employees.

Conclusion

In summary, the Supreme Court allowed the appeals in part, ensuring that employees absorbed into the MPSEB receive pension benefits from the date of their absorption. This decision underscores the importance of equitable treatment and non-discrimination in the application of pension rules, providing clarity and consistency for employees in similar situations.