Supreme Court Clarifies Lien Termination in Government Service: State of Rajasthan vs. Dr. Hamir Singh Chouhan (2023)

Date of the Judgment: April 28, 2023

Citation: 2023 INSC 384

Judges: M.R. Shah, J. and C.T. Ravikumar, J.

Can a government employee claim pensionary benefits from the State Government after being permanently absorbed into a separate entity and receiving retirement benefits from that entity? The Supreme Court of India addressed this question in a recent case involving employees of the Rajasthan Animal Husbandry Department who were later absorbed into the Rajasthan Co-operative Dairy Federations. The court examined whether their lien with the State Government continued despite their permanent absorption into the Dairy Federations. The judgment was delivered by a two-judge bench comprising Justice M.R. Shah and Justice C.T. Ravikumar, with Justice M.R. Shah authoring the opinion.

Case Background

The respondents were initially appointed in the Animal Husbandry Department of the State of Rajasthan as either Animal Husbandry Extension Officers or Veterinary Assistant Surgeons in 1971. Between 1976 and 1978, they were selected for positions in the Rajasthan Co-operative Dairy Federations (Dairy Federations) after a due selection process. The respondents’ names appeared in the seniority list of the Dairy Federations, and they were promoted within the Dairy Federations in 1983 or 1989. All of them retired as employees of the Dairy Federations between 1999 and 2003, receiving retirement benefits from the Dairy Federations. After approximately six to nine years post-retirement, the respondents filed writ petitions claiming pensionary benefits from the State Government, arguing that their lien with the State continued until their permanent absorption with the Dairy Federations. The State Government terminated the lien of the respective respondents in 1988/1993, effective from the date of their absorption in the Dairy Federations.

Timeline:

Course of Proceedings

The learned Single Judge of the High Court allowed the writ petitions filed by the respondents, ruling that they were entitled to receive pensionary benefits from the State Government by treating their lien as continuing with the State Government until the date of their permanent absorption with the Dairy Federations. Aggrieved by the decision of the Single Judge, the State of Rajasthan filed appeals before the Division Bench of the High Court. The Division Bench dismissed the appeals, upholding the decision of the Single Judge. Subsequently, the State of Rajasthan filed the present appeals before the Supreme Court.

Legal Framework

The case primarily revolves around the interpretation of the Rajasthan Service Rules, 1951, specifically Rule 18, which deals with the termination of lien. Rule 18(2) of the Rajasthan Service Rules, 1951 states:

“a Government servant’s lien to a post stands terminated on his acquiring a lien on a permanent post, which is outside the cadre post.”

The court also considered the Government Order (G.O.) dated 30.01.1976, which stated that the lien of employees joining the Dairy Federations would be maintained for a period of two years or until their confirmation in the Corporation/Union, whichever is earlier. The court examined whether this G.O. could override the provisions of the Rajasthan Service Rules, 1951.

Arguments

Arguments by the State of Rajasthan:

• The State argued that the respondents were selected through a due process between 1976 and 1978 in the Dairy Federations and were permanently absorbed as employees of the Dairy Federations.
• The State contended that as per the G.O. dated 30.01.1976, the lien of the respondents was maintained for a maximum of two years or until their confirmation in the Dairy Federations, whichever was earlier.
• The State submitted that once the respondents were confirmed in the Dairy Federations, they ceased to have a lien with the State Government, as per Rule 18(2) of the Rajasthan Service Rules, 1951.
• The State relied on the judgment in State of Rajasthan and Anr. Vs. S.N. Tiwari and Ors., (2009) 4 SCC 700, which held that a person cannot hold two substantive posts simultaneously and that acquiring a lien on a new post terminates the previous lien.

Arguments by the Respondents:

• The respondents argued that they were sent on deputation to the Dairy Federations and therefore, they continued to have a lien with the State Government.
• The respondents submitted that their lien with the State Government could not be terminated until their absorption with the Dairy Federations.
• The respondents contended that the G.O. dated 30.01.1976 was merely a guideline and could not override the Rajasthan Service Rules, 1951.
• The respondents argued that as per Rules 15 and 18 of the Rajasthan Service Rules, 1951, a government servant’s lien cannot be terminated even with their consent if they are left without a lien.
• The respondents stated that they continued to be government servants until their absorption in the Dairy Federations and were therefore entitled to pension under the applicable rules.
• The respondents argued that Rule 158 of the Rajasthan Service Rules, 1951, governs the cases of pension of those who are working under the Local Bodies and paid by the Local Funds administered by the Government of Rajasthan, but so far as the respondents are concerned, they were continuing as confirmed Government servants without confirmation in their respective unions.

Submissions Table

Issues Framed by the Supreme Court

The primary issue before the Supreme Court was:

✓ Whether the respondents were entitled to claim pensionary benefits from the State Government after being permanently absorbed in the Dairy Federations and receiving retirement benefits from the Dairy Federations.

Treatment of the Issue by the Court

Authorities

Case Laws:

• State of Rajasthan and Anr. Vs. S.N. Tiwari and Ors., (2009) 4 SCC 700 – Supreme Court of India
  
  This case was cited to support the principle that a person cannot hold two substantive posts simultaneously and that acquiring a lien on a new post terminates the previous lien.

Legal Provisions:

• Rule 18(2), Rajasthan Service Rules, 1951
  
  “a Government servant’s lien to a post stands terminated on his acquiring a lien on a permanent post, which is outside the cadre post.”
  
  This rule was cited to establish that the respondents’ lien with the State Government was terminated upon their permanent absorption into the Dairy Federations.

Authority Table

Judgment

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

How each authority was viewed by the Court?

The Supreme Court relied on State of Rajasthan and Anr. Vs. S.N. Tiwari and Ors., (2009) 4 SCC 700, to reinforce the principle that a person cannot hold two substantive posts simultaneously. The court also applied Rule 18(2) of the Rajasthan Service Rules, 1951, to conclude that the respondents’ lien with the State Government was terminated upon their permanent absorption into the Dairy Federations.

The Supreme Court held that the respondents were not entitled to pensionary benefits from the State Government. The court reasoned that once the respondents were permanently absorbed into the Dairy Federations, they ceased to have a lien with the State Government. The court emphasized that the respondents were informed that their appointment in the Dairy Federations was a fresh appointment and that their lien with the State Government would be maintained for a maximum of two years or until their confirmation in the Dairy Federations, whichever was earlier. The court noted that the respondents accepted these terms and conditions and also received retirement benefits from the Dairy Federations. The court stated that there cannot be two liens on two substantive posts.

The court quoted from the judgment:

“With reference to your application and interview for the post of Assistant Officer you are informed that before the appointment can be made your acceptance to the following terms and conditions is necessary.”

“Regarding your previous service the matter will have to be settled between you and the State Government. So far as the Corporation is concerned this will be a fresh appointment.”

“a Government servant’s lien on a post stands terminated on his acquiring a lien on a permanent post outside the cadre on which he is borne”

What weighed in the mind of the Court?

The Supreme Court’s decision was primarily influenced by the following factors:

Sentiment Analysis:

Fact:Law Ratio:

The court’s decision was driven by the factual circumstances of the case, specifically the terms and conditions of the respondents’ appointment in the Dairy Federations, which clearly stated that it was a fresh appointment. The court also relied on the legal principle that a person cannot hold two substantive posts simultaneously and that acquiring a lien on a new post terminates the previous lien. The court’s reasoning emphasized the importance of adhering to the terms of employment and the applicable service rules.

Logical Reasoning

Key Takeaways

• A government employee’s lien on a previous post is terminated upon their permanent absorption into another organization, especially when the terms of appointment in the new organization explicitly state that it is a fresh appointment.
• Employees cannot claim pensionary benefits from the State Government after being permanently absorbed into a separate entity and receiving retirement benefits from that entity.
• The terms and conditions of employment, as well as the applicable service rules, are crucial in determining an employee’s rights and entitlements.
• This judgment clarifies the principle that a person cannot hold two substantive posts simultaneously and that acquiring a lien on a new post terminates the previous lien.

Directions

The Supreme Court directed that the respondents were not entitled to the pensionary benefits from the State Government as directed by the learned Single Judge and the Division Bench.

Development of Law

The ratio decidendi of this case is that a government employee’s lien on a previous post is terminated upon their permanent absorption into another organization, particularly when the terms of appointment in the new organization explicitly state that it is a fresh appointment. This judgment reinforces the principle that a person cannot hold two substantive posts simultaneously. It clarifies that once an employee is permanently absorbed into a new entity and receives retirement benefits from that entity, they cannot claim pensionary benefits from the State Government based on their previous service.

Conclusion

The Supreme Court’s judgment in State of Rajasthan vs. Dr. Hamir Singh Chouhan clarifies that a government employee’s lien with the State Government is terminated upon their permanent absorption into another organization, such as the Rajasthan Co-operative Dairy Federations. The court held that the respondents were not entitled to pensionary benefits from the State Government after receiving retirement benefits from the Dairy Federations. This decision reinforces the principle that a person cannot hold two substantive posts simultaneously and that acquiring a lien on a new post terminates the previous lien. The judgment underscores the importance of adhering to the terms of employment and the applicable service rules.