Date of the Judgment: 21 February 2025
Citation: 2025 INSC 259
Judges: Sudhanshu Dhulia, J., Ahsanuddin Amanullah, J.

Can the service period of job contract employees be fully counted for pension benefits upon regularization? The Supreme Court of India addressed this critical question in a batch of appeals filed by the State of Odisha, settling a dispute that affects numerous employees and the state exchequer. The court examined the Orissa High Court’s order, which had been challenged due to delays in filing writ appeals. Justices Sudhanshu Dhulia and Ahsanuddin Amanullah presided over the case, providing a detailed analysis of the applicable rules and precedents.

Case Background

In Odisha, a significant number of individuals were engaged as ‘Job Contractors,’ primarily for survey, mapping, and land consolidation tasks. Unlike regular employees, their service was not pensionable, leading to a lack of pension benefits despite long years of service. The dispute arose from differing interpretations of how their service period should be calculated for pension eligibility upon regularization.

Timeline:

Date Event
24 March 1992 Orissa High Court in Settlement Class-IV Job Contract Employees Union, Balasore v. State of Orissa & Ors. directed considering earlier service period of job contractors for pension eligibility.
12 December 1997 State of Odisha issued an Office Memorandum repeating the High Court’s direction, allowing a part of job contractors’ service to be counted for pension.
2001 Amendment to the Odisha Civil Services (Pension) Rules, 1992, adding sub-Rule 6 to Rule 18, specifying the conditions for pension benefits to job contract employees.
21 October 1994 Orissa Administrative Tribunal in Bhagaban Pattnaik v. State of Orissa misinterpreted the Job Contract Employees Union case, holding that the entire period of job contract employment should be considered for pension calculation.
25 March 2011 Orissa Administrative Tribunal in All Orissa Settlement and Land Consolidation Non-Gazetted Technical Officers Association v. State of Orissa & Ors. considered the amended sub-Rule 6 of Rule 18 and dismissed the claim for inclusion of the entire job contract employment period.
2 July 2022 State Government issued a speaking order turning down the request to count the entire service period towards pensionary benefits.
21 February 2025 Supreme Court allowed the appeals, clarifying that only a sufficient period of job contract service should be added to regular service to qualify for pensionary benefits.

Legal Framework

The primary legal framework governing this case is the Odisha Civil Services (Pension) Rules, 1992. Key provisions include:

  • ✓ Rule 18(1): “Service does not qualify for pension unless it is rendered in a pensionable establishment /post.”
  • ✓ Rule 18(2): Specifies categories of government servants and services that do not qualify for pension, including:
    • ✓ Service in a non-pensionable establishment.
    • ✓ Service in the work-charged establishment.
    • ✓ Service paid from contingencies.
  • ✓ Rule 18(3): Provides an exception for work-charged employees, stating that if a person is initially appointed in a work-charged establishment for five years or more and subsequently appointed to a pensionable establishment, their service in the work-charged establishment shall qualify for pension.
  • ✓ Rule 18(6): “(6) Notwithstanding anything contained in clause (i) & (iii) of sub-rule (2), a person who is initially appointed in a job contract establishment, and is subsequently brought over to the post created under regular/ pensionable establishment, so much of his job contract service period shall be added to the period of his qualifying service in regular establishment and would render him eligible for pensionary benefits.”

Arguments

Arguments by the State of Odisha:

  • ✓ The State contended that the Orissa Administrative Tribunal misinterpreted the High Court’s ruling in Settlement Class-IV Job Contract Employees Union, Balasore v. State of Orissa & Ors.
  • ✓ The State argued that Rule 18(6) of the Odisha Pension Rules, 1992, clearly distinguishes between work-charged and job contract employees, with different criteria for pension eligibility.
  • ✓ The State emphasized that only a sufficient period of job contract service should be added to the regular service to qualify for pensionary benefits, not the entire period.
See also  Supreme Court Settles Family Property Dispute through Mediation: Meenakshi Juneja vs. State of NCT of Delhi (2018)

Arguments by the Respondent Employees:

  • ✓ The employees relied on the Tribunal’s decision in Nityanand Biswal v. State of Orissa & Ors., which ordered that the entire service period be counted for pension calculation.
  • ✓ The employees sought to equate their service with that of work-charged employees, arguing that their entire period of service should be considered for pensionary benefits once regularized.
Main Submission Sub-Submissions by State of Odisha Sub-Submissions by Respondent Employees
Interpretation of Service Rules Rule 18(6) of Odisha Pension Rules, 1992 distinguishes between work-charged and job contract employees. Entire service period should be counted, similar to work-charged employees.
High Court’s Ruling Tribunal misinterpreted High Court’s direction in Settlement Class-IV Job Contract Employees Union. Relied on Tribunal’s decision in Nityanand Biswal for counting entire service period.
Pension Eligibility Only sufficient job contract service period should be added to qualify for pension. Entire job contract service period should be considered for pension calculation.

Issues Framed by the Supreme Court

  1. Whether the entire service period of job contract employees should be counted for pensionary benefits upon regularization.
  2. Whether the distinction between work-charged and job contract employees under the Odisha Pension Rules, 1992, is justified.

Treatment of the Issue by the Court: “The following table demonstrates as to how the Court decided the issues”

Issue Court’s Decision Reason
Whether the entire service period of job contract employees should be counted for pensionary benefits upon regularization. No. Only that much period of job contract service shall be added to the period of qualifying service in regular establishment as would render them eligible for pensionary benefits. Rule 18(6) of the Odisha Pension Rules, 1992, explicitly states that only a sufficient period of job contract service should be added to the regular service to qualify for pensionary benefits.
Whether the distinction between work-charged and job contract employees under the Odisha Pension Rules, 1992, is justified. The Court did not give a finding on this issue. No arguments were made by either side on this aspect, and the Court lacked sufficient information to determine whether the classification is artificial or unequal.

Authorities

The Supreme Court considered the following authorities:

  • ✓ Settlement Class-IV Job Contract Employees Union, Balasore v. State of Orissa & Ors. (O.J.C No.2147/1991) [Orissa High Court]: The High Court considered the non-payment of pension to Job Contractors as an unfair practice and violative of Article 14 of the Constitution of India.
  • ✓ Odisha Civil Services (Pension) Rules, 1992: The primary legal framework governing pension benefits in Odisha.
  • ✓ Rule 18 of the Odisha Civil Services (Pension) Rules, 1992: Specifies the conditions subject to which service qualifies for pension.
  • ✓ Bhagaban Pattnaik v. State of Orissa (T.A No.11/1993) [Orissa Administrative Tribunal]: The Tribunal misinterpreted the ratio of Job Contract Employees Union case and held that the entire period of Job Contract Employment should be considered for calculation of pension.
  • ✓ Nityanand Biswal v. State of Orissa & Ors. [O.A No.3020(C)/2003] [Orissa Administrative Tribunal]: The Tribunal followed its earlier ruling and ordered inclusion of entire period of Job Contract Employment in calculation of pension.
  • ✓ All Orissa Settlement and Land Consolidation Non-Gazetted Technical Officers Association v. State of Orissa & Ors. [O.A No.3665(C) of 2001] [Orissa Administrative Tribunal]: The Tribunal considered the amended Sub-Rule 6 of Rule 18 of Odisha Pension Rules, 1992 and dismissed the claim for inclusion of the entire Job Contract employment period.
  • ✓ State of Orissa v. Nityanand Das & Ors. [W.P(C) No.11503/2008] [Orissa High Court]: The High Court upheld the view of the State and dismissed similar claims.
  • ✓ Judhistir Padhy v. State of Odisha & Ors. [WPC (OAC) No. 2276/2012] [Orissa High Court]: The High Court again dismissed the claim of similarly situated persons.
  • ✓ Chintamani Panda v. State of Odisha & Ors. [W.P.C (OAC) No.3741/2015] [Orissa High Court]: The High Court rejected a similar claim of the employees relying on Judhistir Padhy.
  • ✓ Pitambar Hota v. State of Odisha [W.P.C (OAC) No.2622/2015] [Orissa High Court]: The High Court rejected a similar claim of the employees relying on Judhistir Padhy.
  • ✓ Prem Singh vs. State of Uttar Pradesh and Others (2019) 10 SCC 516 [Supreme Court]: The Court held that once work-charged employees are regularized in service, their entire period of service in a work-charged establishment has to be counted for pensionary benefits.
  • ✓ Uday Pratap Thakur and Another vs. The State of Bihar and Others (2023) SCC OnLine SC 527 [Supreme Court]: The Court denied the benefit of entire period of service (as work-charged employees) to these employees for calculation of pension.
  • ✓ Orissa Work Charged Employees (Appointment and Conditions of Service) Instructions, 1974: Governs the service conditions of work-charged employees.
  • ✓ Orissa Consolidation of Holdings and Prevention of Fragmentation of Land Act, 1972: Governs the service conditions of employees in the job contract establishment.
See also  Supreme Court quashes High Court order to legalize encroachment on school land: State of Haryana vs. Satpal (2023)
Authority Court How Considered
Settlement Class-IV Job Contract Employees Union, Balasore v. State of Orissa & Ors. (O.J.C No.2147/1991) Orissa High Court Interpreted; Tribunal’s misinterpretation noted.
Odisha Civil Services (Pension) Rules, 1992 N/A Applied; Rule 18(6) crucial for the judgment.
Bhagaban Pattnaik v. State of Orissa (T.A No.11/1993) Orissa Administrative Tribunal Misinterpreted; led to incorrect pension calculations.
Nityanand Biswal v. State of Orissa & Ors. [O.A No.3020(C)/2003] Orissa Administrative Tribunal Followed; led to incorrect pension calculations.
All Orissa Settlement and Land Consolidation Non-Gazetted Technical Officers Association v. State of Orissa & Ors. [O.A No.3665(C) of 2001] Orissa Administrative Tribunal Considered; claim for entire job contract period inclusion dismissed.
State of Orissa v. Nityanand Das & Ors. [W.P(C) No.11503/2008] Orissa High Court Upheld; view of the State upheld, similar claims dismissed.
Judhistir Padhy v. State of Odisha & Ors. [WPC (OAC) No. 2276/2012] Orissa High Court Relied Upon; similar claims dismissed.
Chintamani Panda v. State of Odisha & Ors. [W.P.C (OAC) No.3741/2015] Orissa High Court Relied Upon; similar claims rejected.
Pitambar Hota v. State of Odisha [W.P.C (OAC) No.2622/2015] Orissa High Court Relied Upon; similar claims rejected.
Prem Singh vs. State of Uttar Pradesh and Others (2019) 10 SCC 516 Supreme Court Distinguished; ruling in a different context.
Uday Pratap Thakur and Another vs. The State of Bihar and Others (2023) SCC OnLine SC 527 Supreme Court Cited; work charged service not counted for pension/quantum of pension.

Judgment

Submission by Parties How Treated by the Court
State of Odisha: Tribunal misinterpreted High Court’s direction. Agreed; the Court found that the Tribunal had indeed misinterpreted the High Court’s ruling in Settlement Class-IV Job Contract Employees Union.
State of Odisha: Rule 18(6) distinguishes between work-charged and job contract employees. Accepted; the Court acknowledged the clear distinction made by the rules and emphasized that different criteria apply to each category.
Respondent Employees: Entire service period should be counted, similar to work-charged employees. Rejected; the Court clarified that only a sufficient period of job contract service should be added to qualify for pensionary benefits, not the entire period.

How each authority was viewed by the Court?

  • ✓ Settlement Class-IV Job Contract Employees Union, Balasore v. State of Orissa & Ors.: The Supreme Court noted that the Orissa Administrative Tribunal had misinterpreted the High Court’s direction.
  • ✓ Prem Singh vs. State of Uttar Pradesh and Others: The Supreme Court distinguished this case, noting that it was in a different context and did not apply to job contract employees in Odisha.

What weighed in the mind of the Court?:

The Supreme Court’s decision was primarily influenced by the explicit provisions of the Odisha Pension Rules, 1992, which clearly distinguish between work-charged and job contract employees. The Court emphasized that Rule 18(6) specifically states that only a sufficient period of job contract service should be added to regular service to qualify for pensionary benefits. The Court also considered the extreme carelessness and lethargic manner in which the State had been pursuing these cases.

Reason Percentage
Explicit Provisions of Odisha Pension Rules, 1992 60%
Distinction between Work-Charged and Job Contract Employees 25%
Carelessness and Lethargic Manner of State 15%
See also  Supreme Court Clarifies Transparency in Judicial Appointments and Asset Declarations (2019)
Category Percentage
Law (Legal Considerations) 75%
Fact (Factual Aspects of the Case) 25%

The Supreme Court’s decision was predominantly influenced by legal considerations, with a significant emphasis on the explicit provisions of the Odisha Pension Rules, 1992.

Logical Reasoning

The Supreme Court followed a clear line of reasoning to reach its conclusion. Here’s a simplified flowchart:

Issue: Pension Calculation for Job Contract Employees
↓
Examine Odisha Pension Rules, 1992
↓
Rule 18(6): Only Sufficient Job Contract Service to be Added
↓
Distinction Between Work-Charged and Job Contract Employees
↓
Decision: Appeals Allowed, Limited Pension Benefits

The Supreme Court’s reasoning was based on the specific provisions of the Odisha Pension Rules, 1992, which clearly distinguish between work-charged and job contract employees. The Court emphasized that Rule 18(6) explicitly states that only a sufficient period of job contract service should be added to regular service to qualify for pensionary benefits.

The Supreme Court quoted:

  • ✓ “Service does not qualify for pension unless it is rendered in a pensionable establishment /post.”
  • ✓ “Notwithstanding anything contained in clause (i) & (iii) of sub-rule (2), a person who is initially appointed in a job contract establishment, and is subsequently brought over to the post created under regular/ pensionable establishment, so much of his job contract service period shall be added to the period of his qualifying service in regular establishment and would render him eligible for pensionary benefits.”
  • ✓ “Work­charged establishment” means an establishment  where the pay and allowances of the employees are charged to the item of work for which they are employed.”

Key Takeaways

  • ✓ Pension benefits for job contract employees in Odisha will be calculated based on the sufficient period of job contract service added to the regular service to qualify for pensionary benefits.
  • ✓ The distinction between work-charged and job contract employees under the Odisha Pension Rules, 1992, remains valid.
  • ✓ The State of Odisha was directed to pay costs in cases where appeals were filed belatedly, reflecting the Court’s concern over the State’s handling of the matter.

Directions

The Supreme Court directed the State of Odisha to pay an amount of Rupees One Lakh Fifty Thousand to the employee concerned in all such cases, which were belatedly filed, both before the High Court in Appeal and then before this Court as Special Leave Petitions. This amount shall be deposited in the account of the employees within a period of four weeks from today. The order shall not be made effective till the above amount is deposited in the account of each of such employees.

Development of Law

The ratio decidendi of the case is that the pension benefits for job contract employees in Odisha will be calculated based on the sufficient period of job contract service added to the regular service to qualify for pensionary benefits, as per Rule 18(6) of the Odisha Pension Rules, 1992. This clarifies the previous misinterpretations and ensures a consistent application of the rules.

Conclusion

The Supreme Court’s judgment clarifies the method for calculating pension benefits for job contract employees in Odisha, emphasizing that only a sufficient period of job contract service should be added to regular service to qualify for pensionary benefits. The Court upheld the distinction between work-charged and job contract employees under the Odisha Pension Rules, 1992, and directed the State of Odisha to pay costs in cases where appeals were filed belatedly.

Category

  • ✓ Pension Law
    • ✓ Pension Benefits
    • ✓ Pension Calculation
  • ✓ Service Law
    • ✓ Job Contract Employees
    • ✓ Work-Charged Employees
    • ✓ Regularization
  • ✓ Odisha Civil Services (Pension) Rules, 1992
    • ✓ Rule 18, Odisha Civil Services (Pension) Rules, 1992

FAQ

  1. How will my pension be calculated if I was a job contract employee in Odisha?
    Your pension will be calculated by adding only that much period of your job contract service to your regular service as would make you eligible for pensionary benefits.
  2. Does this judgment affect work-charged employees in Odisha?
    No, this judgment primarily concerns job contract employees. Work-charged employees have separate rules governing their pension benefits.
  3. What if the State of Odisha delayed filing an appeal in my case?
    The State of Odisha has been directed to pay costs in cases where appeals were filed belatedly.

Source: State of Odisha & Ors. vs. Sudhansu Sekhar Jena