Central Administrative Tribunal - Madras
P K Cherian vs M/O Labour on 26 August, 2025
1 OA 1530/2018
CENTRAL ADMINISTRATIVE TRIBUNAL
CHENNAI BENCH
OA/310/01530/2018
Dated the 26th day of August, Two Thousand Twenty-Five
CORAM:
HON'BLE MR M. SWAMINATHAN, MEMBER (J)
&
HON'BLE MR. SISIR KUMAR RATHO, MEMBER(A)
P. K. Cherian
82, Shanthi Nagar, 1st Street,
S. M. Nagar Post,
Avadi, Chennai 600 062 ...Applicant
By Advocate : M/s. V. Raghavachari
Vs
1. Union of India rep by its
The Secretary,
Ministry of Labour & Employment,
Shram Shakthi Bhavan,
3 & 4 Rafi Marg,
New Delhi 110 001
2. The Deputy Director General,
Directorate General of Employment
Shram Shakthi Bhavan,
3 & 4 Rafi Marg,
New Delhi 110 001
3. The Deputy Director In-charge
Vocational Rehabilitation Centre
for Handicapped,
Guindy, Chennai 600 032 ...Respondents
By Advocate : Mr. K. Rajendran
2 OA 1530/2018
ORDER
(Pronounced by Hon'ble Mr. M. Swaminathan, Judicial Member) This OA has been filed by the applicant seeking the following relief:
"To call for records vide order NSC/CH/A-20058/1/2009/Admn/221, dated 19.03.2008, on the file of the 3rd respondent and quash the same and regularize the service of the applicant from 17.08.14982 to 30.06.1986 and refix the pay with effect date of appointment and consequently grant 3rd MACP with pensionary benefits with interest till date, and pass such further or other orders as may be deemed fit and proper in the circumstance of the case and thus render justice."
2. Brief facts of the case, as submitted by the applicant:
The Applicant joined the respondent department on 17.08.1982. The appointment was on Adhoc basis as there were no recruitment rules framed by the respondent for the newly created post of Rehabilitation Counsellor and was made to render service. The service of the applicant was regularized on 01.07.1986. The applicant made representation dated 05.11.2014, to the 1 st respondent to regularize the service rendered by him during 17.08.1982 to 30.06.1986, i.e., 3 years, 10 months and 13 days and for pensionary benefits on the account of fact that the junior of the applicant holding the same post was drawing Rs.6600/- wherein the applicant was drawing Rs.4800/- The respondent had acceded to consider the case of the applicant and sought service records of the applicant. The Applicant submitted his service records along with representation dated 25.05.2016. The applicant was put to shock that adhoc service of the applicant cannot be regularized on the fact that there were no recruitment rules framed. The applicant filed an OA before this Tribunal in OA No.1337/2017, 3 OA 1530/2018 and the same was disposed of by order dated 21.08.2017 to consider the representation of the applicant. On 19.03.2018, the respondent passed a speaking order rejecting the claim of the application. Left with no other efficacious remedy the applicant has filed the present OA seeking redressal.
3. The learned counsel for the applicant submitted that the applicant was appointed in a Group C post on Adhoc basis in Rehabilitation Counsellor in the Vocational Rehabilitation Centre for Handicapped on 17.08.1982. The said Group 'C' post was later upgraded to Group 'B' under the Director General of Employment & Training, Ministry of Labour and Employment, Government of India. He further submitted since there were no recruitment rules the applicant was appointed on adhoc basis, and after the notification of recruitment rules in the year 1985, the applicant was regularized on 01.07.1986.
4. Learned counsel for the applicant further submitted that the applicant had made several representations to the respondents to regularize his service for the period from 17.08.1982 to 30.06.1986, but there were no responses from the respondents. Hence the applicant approached this Tribunal in OA No.1337/2017. This Tribunal by order dated 21.08.2017 disposed of the OA with a direction to the respondents to deal with representation of the applicant for regularization within a period of 2 months from the 4 OA 1530/2018 date of receipt of copy of the order. Subsequently, the respondents by order dated 19.03.2018, rejected the claim of the applicant by passing a speaking order
5. Learned counsel for the applicant further submitted that the impugned order passed by the respondent is illegal and without any justification. He submitted that the DPC had clearly recorded about regularizing similarly placed candidate like Smt P. Sasikala, whose adhoc period of 6 years 5 months 4 days relating back to the date of appointment was regularised with service benefits. Not granting the same to the applicant is violative Article 16 of the constitution of India. He relied upon the latest decision of the Hon'ble Supreme Court of India in the case S.D. Jayaprakash & Others Vs The Union of India & others, Civil Appeals arising out of SLP Nos.19539-19540/2021, order dated 29.04.2025. Therefore, he prayed for the relief sought in the present OA.
6. Per contra, the learned counsel for the respondents vehemently opposed the submission of the applicant and relied on the reply statement. He submitted that the applicant is comparing with one Smt. P. Sasikala, Intake Assistant NCSC for DA, Chennai. He further submitted that Smt. P. Sasikala, Intake Assistant, a Group 'C' post whereas the applicant was appointed as Rehabilitation Counsellor, a Group "B' post (non-gazetted). These two post are different in terms of eligibility, duties, responsibilities 5 OA 1530/2018 and have separate Recruitment rules. The RR for the post of Intake Assistant were notified on 12.07.1980, while for Rehabilitation Counsellor the RR was notified on 03.08.1985. Hence both the cases are different and not comparable. He further submitted that after the notification of the RRs, the applicant was appointed on regular basis on 01.07.1986 and in the order of appointment it was clearly stated that he would be in probation for a period of two years.
7. The learned counsel for the respondents further contended that the applicant retired on 30.09.2013 and by that time he had completed only 27 years, 2 months and 29 days' regular service. As per MACP Scheme dated 19.05.2009, 30 years of regular service or 10 years' regular service in the same pay scale after 2 nd financial upgradation or promotion is required for considering a case for granting 3rd financial upgradation under the said scheme. In the present case, the applicant is not fulfilling the criteria of eligibility, therefore his case could not be considered for granting of 3 rd financial upgradation under MACP as prayed for. Therefore, he prayed for the dismissal of the OA.
8. We have heard both the parites at length, perused the pleadings and materials on record, including the citations cited by the respective parties.
6 OA 1530/2018
9. We would like to extract Rule 17 of the Pension Rules deals with counting of service on contract for the purpose of granting pension, which squarely covers the issue in the present case. It is extracted below for ready reference:
"17. Counting of service on contract -
(1) A person who is initially engaged by the Government on a contract for a specified period and is subsequently appointed to the same or another post in a substantive capacity in a pensionable establishment without interruption of duty, may opt either:-
(a) to retain the Government contribution in the Contributory Provident Fund with interest thereon including any other compensation for that service; or
(b) to agree to refund to the Government the monetary benefits referred to in Clause (a) or to forgo the same if they have not been paid to him and count in lieu thereof the service for which the aforesaid monetary benefits may have been payable.
(2) The option under sub-rule (1) shall be communicated to the Head of Office under intimation to the Accounts Officer within a period of three months from the date of issue of the order of permanent transfer to pensionable service, or if the Government servant is on leave on that day, within three months of his return from leave, whichever is later.
(3) If no communication is received by the Head of Office within the period referred to in sub-rule (2), the Government servant shall be deemed to have opted for the retention of the monetary benefits payable or paid to him on account of service rendered on contract."
10. We further find the present issue is no more res integra and the Hon'ble Delhi High Court in the case of Chandi Prasad & others Vs Union of India & others in WP (C) No.3481/2019, order dated 19.09.2024, had answered the question that the entire service of the applicant from the date of initial appointment on daily wages/adhoc/temporary basis till the date of permanent appointment/regularization shall be counted as qualifying service for the purpose of pension and they will be deemed to be in service prior to 01.01.2004 and governed by old pension scheme. The 7 OA 1530/2018 relevant portion of the judgement is extracted below:
"10. The issue framed by the Court for its consideration was as follows:
"21. The framing of the issue would not govern the outcome of the case. The primary issue for consideration was whether in the peculiar facts and circumstances of the case, respondents who had been appointed on ad-hoc basis before 01.04.2004 could avail the benefit of OPS?"
11. This judgment is significant for the present petition inasmuch as it deals with both the aspects arising herein i.e. initial appointment being temporary/ad-hoc followed by regularisation and criteria for coverage under OPS/NPS Scheme. The High Court observed that Respondents could not be treated as fresh appointees in stricto-senso. As per the terms and conditions of the appointment letters, their services as ad-hoc appointees were not considered for purpose of their regularisation but on their successful appointment as regular employees, services rendered on ad-hoc basis were safeguarded for purpose of pay protection. Affirming the decision of the Tribunal, Court held that the Tribunal rightly came to a conclusion that Respondents would be governed by OPS. Relevant paragraphs of the judgment are as follows:
"22. The Tribunal has examined the issue in two different ways. The relevant observation of the Tribunal on this aspect reads thus:-
"14. Ex-facie, the main celebrated arguments of the learned counsel for the respondents and their objections projected in the impugned orders, that since the PGIMER, Chandigarh, has not taken any approval of the Department of Personnel & Training (DoPT) before extending the adhoc appointments, till the regular appointments of the applicants, so they are not entitled for the benefit of the GPF-cum-Old Pension Scheme, and if it is granted to them, then it will open floodgates of litigation, for other institutions, are not only devoid of merit, but mis- placed as well and deserve to be repelled for, more than one, (following) reasons.
15. At the first instance, it is not a matter of dispute, that having possessed the requisite qualifications and experience etc, in pursuance of the advertisement and having successfully completed the recruitment process as per statutory rules and regulations of the PGIMER, all the Doctors (applicants) were duly appointed as Assistant Professors, in their respective fields, during the period ranging from 1996 to 2003, by the Competent Authority. Since then, they are performing the same duties with devotion, which are performed by regular appointees. Similarly, the clinical duties of all the Doctors (applicants) are the same, as performed by regular incumbents. Subsequently, the PGIMER advertised the posts manned by the applicants, for filling on regular basis. The applicants, have requisite qualifications & experience, and were eligible for regular appointments against the said posts, as well. They were duly selected and appointed, on regular basis, without any interruption maintaining and protecting their continuity in service, pay scale and other service benefits, including the increments, which they were drawing as adhoc appointees.
16. In that eventuality, for the purpose of pensionary benefits, the qualifying service of the applicants shall commence from the date, they took charge of the posts, to which they were first appointed, in temporary capacity, as that temporary service was followed, without interruption, by substantive permanent appointments in the same 8 OA 1530/2018 service/posts, as contemplated under Rule 13 (Chapter III) of the Central Civil Services (Pension) Rules, 1972 (Annexure A-28).
17. Not only that, as indicated hereinabove, the applicants continued working, as such, uninterruptedly and without any break. Even the Respondents No. 2 & 3, have duly acknowledged the factual matrix, in this regard, in their written statement."
xxx xxx xxx
23. In the same manner, the second feeble argument & ground to reject the claim of the applicants, vide impugned order, Annexure A-1, that if the request of faculty members of the Institute is allowed, then it will give rise and would open flood gates of litigation by a number of representations from various other Institutions/organizations, is again not, at all, tenable. Once, it is held that the applicants are legally entitled to the benefit of GPF-cum-Old Pension Scheme, as discussed here-in-above, then their claim cannot possibly be denied on the ground that it will give rise to a number of representations and would open flood gates of litigations, by various other Institutions/ organizations for grant of similar relief. It is now well settled principle of law that the legitimate and legal right of the applicants cannot be denied to them, in the garb of plea of opening of Flood Gate Litigations.
xxx xxx xxx
26. This is not the end of the matter. What cannot possibly be disputed is that in the wake of representations of the applicants, the Director of the PGIMER, vide letter dated 21.1.2010, favourably recommended their cases and forwarded it to be put up and the Governing Body of the PGIMER (Central Government), in its meeting, held in January, 2011, had constituted a 6 Member sub-Committee, to look into the grievance of the applicants. The Committee had also favourably recommended their case, vide letter dated 14.9.2011 (Annexure A-14). Then, the matter was considered by the Governing Body under Agenda No. F-6 on 28.04.2012 and it was resolved that all these faculty members were on ad-hoc basis for a long period and could have been regularized prior to 01.01.2004, had the Selection Committee met earlier.
27. Meaning thereby, had the meeting of the Governing Body was timely held, then the service of the applicants would have been regularized much prior thereto. In other words, since the respondents failed to convene the timely meeting of the Governing Body, so the applicants, cannot, possibly be blamed, in any manner, in this regard. Concededly, the Governing Body appreciated the circumstances and after detailed discussion, agreed to approve the proposal to grant the benefit of GPF-cum-Old Pension Scheme, to the applicants, as a special case, vide Agenda Item No. F-6, in its meeting held on 28.4.2012, and it was resolved as under:-
"The matter was discussed in detail. The Governing Body was informed about the recommendations of the Committee under Joint Secretary (HR) of the Ministry and that all these faculty members were on ad-hoc basis for a long period and could have been regularized prior to 01.01.2004, had the Selection Committee met earlier. The Governing Body appreciated the circumstances but at the same time the fact remains that these faculty members were actually appointed on regular basis only after 01.01.2004. After detailed discussion, the Governing Body agreed to approve the proposal as a special case, which could not be cited as a precedence, subject to the approval of the government".
28. Surprisingly enough, the Ministry of Health and the Competent Authority, without assigning any cogent reasons, and without any detailed discussion of 9 OA 1530/2018 legal/rule position and entitlement of the applicants, have taken a somersault, and rejected their claim, on speculative grounds. Admittedly, as per Regulation No. 61 of Schedule-1 appended to PGIMER, Chandigarh Regulations, 1967, its Director has been empowered to appoint Faculty, on adhoc basis, for two years. It was duly acknowledged and explained by Respondents No. 2&3 in their written statement that since, the meeting of the Governing Body, is held once or twice a year, so keeping in view the public interest, exigency of service and heavy rush of patients, the institute filled up these vacancies on adhoc basis, in various disciplines in various departments, as a stop gap arrangement, till final process of recruitment is made. As the applicants, continued on their respective posts, till their regular appointments, so the mere fact the PGIMER has not obtained the approval of the DoPT, is not a ground, much less cogent, to deny the legitimate claims of the applicants, in this relevant connection, as contrary projected on behalf of the respondents. It was for the competent authorities to get alleged approval from the DoPT (if any), and the applicants cannot possibly be blamed, in any manner, in this regard, and their legitimate right cannot be taken away. Thus, any such administrative instructions, requiring the approval of the DoPT, for extension of adhoc service, pail into insignificance, in view of the failure of the authorities. The respondents, therefore, now cannot possibly be heard to say, rather estopped, from their own act and conduct, to deny the pointed benefits of GPF-cum-Old Pension Scheme to the applicants."
xxx xxx xxx
25. It is a fact on record that the respondents were performing the same duties, which were being performed by regular appointees. Respondents continued without any interruption i.e. maintaining and protecting their continuity in service, pay scale and other service benefits, including the increments, as being drawn by them as ad-hoc appointees. The said fact is fortified by the conduct of their appointing authority as pay protection was allowed to them on their appointment on regular basis. However, in the case of fresh appointments they were given a pay scale of fresh appointee. At this stage it would be relevant to reproduce the minutes of Sub-Committee meeting held on 14.09.2011.
"At the outset, the Chairman asked the details of the case from the Member Convener. It was informed to the members that there are about 23 faculty members who were appointed on adhoc basis (as per details in Annexure) without break prior to 01.01.2004 and have been working without break till their appointment on regular basis as Assistant Professors after 01.01.2004. They have represented for applicability of Old Pension Scheme in their case as they were appointed prior to 01.01.2004. It was also informed that the matter was earlier referred to the Govt. of India on 23.06.2009 and in response this Ministry of Health and Family Welfare, vide their letter dated 01.01.2010 intimated that the proposal was sent to DOPT and they have stated that "Since PGIMER, Chandigarh, in their offer of appointment had Stated that only NPS will apply in these cases, it is for them to resolve the matter".
The matter was placed before the Governing Body on 17.01.2011, the Governing Body recommended that Sub-Committee to examine the issue may be constituted in the Ministry as to whether any departure from the NPS can be considered in PGIMER or other similar institutions on the ground that the initial ad-hoc appointments have taken effect from a date earlier than 01.01.2004. Accordingly, a Sub- Committee was constituted under the Chairmanship of JS (HR). The Committee was informed that all these faculty members have been appointed against the regular vacancies and pay protection was also allowed to them on their appointment on regular basis. After due deliberations the Committee considered that there is a case/ground for extending benefits of CCS 10 OA 1530/2018 (Pension) Rules, 1972 (Old Pension Scheme) to these 23 faculty members. The request is further strengthened on the grounds that the meeting of Standing Selection Committee for selecting them on regular basis could not be held regularly, which is beyond the knowledge and control of these 23 faculty members. The Committee, however, further observed that it should be a onetime measure and should not be quoted as precedent in future.
This committee recommends for extending the benefit of Old Pension Scheme to these 23 faculty members after approval by the Competent Authority".
26. For the reasons mentioned above, the respondents were not treated as fresh appointees in stricto sensu. As per the terms and conditions of the appointment letter their services as ad-hoc appointees were not considered for the purpose of their regularisation but on their successful appointment as regular employees the services rendered by them on ad-hoc basis were safeguarded for the purpose of pay protection. In view of above discussion, the Tribunal rightly came to the conclusion that respondents would be governed by OPS prevalent at the time of their initial appointment.
27. Viewed from another angle, the respondents were denied benefit of OPS only on the ground that NPS would apply to employees who were appointed on or after 01.01.2004. It is undisputed that respondents were working against those very posts since 1999 onwards although initially on adhoc basis but that cannot be a ground to disentitle them from benefit of OPS."
12. In A.R.D. Nayagam v. The Director, Local fund Audit, Chennai-108 and Others, 2012 SCC OnLine Mad 5098, Petitioner was appointed as Water Supply Attender on daily wages in 1980 and his service was regularised on 04.08.2006. On attaining the age of superannuation on 31.05.2009, he sought pensionary benefits. However, his request was declined on the ground that Petitioner was not entitled to regular pension but only to a contributory pension since his regular appointment was made after 01.04.2003 as contemplated under G.O.Ms. No.259 dated 08.08.2003. Upon filing the writ petition, Respondent contested the same and stated that Government of India introduced the Contributory Pension Scheme dated 08.08.2003 for employees who joined service on or before 01.04.2003 and therefore, those who joined on or after 01.04.2003 are not eligible for regular pension under Tamil Nadu Pension Rules. As Petitioner's service was regularised in the time scale of pay only w.e.f. 23.06.2006, he was not eligible to regular pension that existed prior to 01.04.2003. Negating the contention of the Respondent, the Madras High Court held as follows:
"7. When the very G.O. says that the new pension scheme, namely contributory pension scheme is applicable to persons, who are newly recruited after 01.04.2003, I fail to understand as to how the respondents are entitled to treat the petitioner as newly recruited person after 01.04.2003, merely because, his service was regularised on 23.06.2006. The respondents are not disputing the fact that the petitioner was originally appointed as Water Supply attender as early as on 27.02.1980. Certainly, the words 'newly recruited' cannot be construed to mean that it applies only to persons, whose services were regularised before 01.04.2003. New recruitment and regularisation are two different aspects and stages and therefore, the respondents are not entitled to put both together in the same boat and deny the benefit of pension under the general scheme to the petitioner."
13. Recently, the High Court of Punjab & Haryana in the case of Union of India & 11 OA 1530/2018 another v. Dr. Sameer Aggarwal & another, decided on 18.04.2022 in CWP No. 7694/2022, relied on the earlier judgment in Dr. Neelam Aggarwal (supra) and granted the same benefit as was granted to the Respondents in Dr. Neelam Aggarwal (supra) and relevant paragraphs of the judgment are as follows:
"It was also noticed by the Tribunal that the said judgment had been upheld by the Co-ordinate Bench in Union of India v. Dr. Neelam Aggarwal, 2019 (4) SCT 842 on 22.10.2018. Resultantly, the Senior Standing Counsel for Union of India could not dispute the fact that the application was allowed in the same terms and the applicant-respondent No. 1 herein was granted the benefit of GPF-cum-Old Pension Scheme (OPS). It is pertinent to mention that the Tribunal did not grant any benefit for the past service rendered by him with Punjab Government but for the arrears towards his claim for pension. The said respondent has also not filed any cross-petition against that claim.
xxx xxx xxx A perusal of the earlier order of the Division Bench would also go on to show that it was noticed by the Division Bench that the similarly situated persons were working against those posts since 1996 and there was continuity of service and the services rendered by them were safeguarded for the purpose of pay-protection. It was also noticed that the PGIMER had extended the benefit of Old Pension Scheme to the similarly situated non-medical faculty and the same was not denied in the writ petition. Accordingly, we are of the considered opinion that respondent No. 1 is identically situated and there was no denial of the said fact in the pleadings before the Tribunal.
Another aspect which is to be noticed is that another Division Bench of this Court in Harbans Lal v. The State of Haryana, 2012 (3) SCT 362, was also noticed in the earlier decision of the Tribunal which had upheld the principle that once the services of work-charge employees were regularized then the earlier service was also liable to be considered for the purpose of pension and the entire service was to be counted back from the said date of his initial appointment. It is not disputed that the SLP No. 23578 of 2012 filed by the State of Punjab was dismissed on 30.07.2012 and Review Petition No. 2038/2013 was also dismissed on 04.11.2015. The relevant portion reads as under:
"From the above discussion, we have come to the conclusion that the entire daily wage service of the petitioner from 1988 till the date of his regularisation is to be counted as qualifying service for the purpose of pension. He will be deemed to be in govt. service prior to 1.1.2004. The new Restructured Defined Contribution Pension Scheme (Annexure P-1) has been introduced for the new entrants in the Punjab Government Service w.e.f. 01.01.2004, will not be applicable to the petitioner. The amendment made vide Annexure P-2 amending the Punjab Civil Services Rules, cannot be further amended by issuing clarification/instructions dated 30.5.2008 (Annexure P-3). The petitioner will continue to be governed by the GPF Scheme and is held entitled to receive pensionary benefits as applicable to the employees recruited in the Punjab Govt. Services prior to 1.1.2004."
Accordingly, keeping in view the above discussion we are of the considered opinion that the present writ petition is liable to be dismissed since respondent No. 1 is identically situated and placed with similarly situated faculty members of petitioner No. 2-Institute. 12 OA 1530/2018
There is no justifiable reason for this Court to interfere on account of the fact that there was an admission regarding all these aspects in the pleadings itself by the petitioner No. 2-Institute. Resultantly, the present writ petition is hereby dismissed."
14. From a conspectus of the aforementioned judgments, it is palpably clear that Courts have repeatedly affirmed that if an employee enters service prior to 01.01.2004, i.e. the date of enforcement of NPS, in whatever capacity, whether as temporary or ad-hoc employee and renders continuous and uninterrupted service, followed by regularisation/absorption, the period of service shall count towards qualifying service for pension and such an employee will be deemed to be in service prior to 01.01.2004 and thus governed by OPS. This is the view taken by this Court in Dr. Archana Verma (supra) and Dr. Ravindra Narayan Mishra (supra). This Court is conscious of the fact that an appeal is pending in Dr. Ravindra Narayan Mishra (supra) but be it noted that when the appeal was listed on 07.05.2024, the Court had made a categorical observation that the Bench was not staying the operation of the order and it would be open to the Respondents to seek implementation of the order as per law. In view of the many judgments, now covering the issue in favour of the Petitioners, it is hardly open to JNU to take a position that Petitioners are covered under the expression "new entrants/new recruits" envisaged under NPS, wiping out their entire past service and depriving them of pension under OPS.
15. For all the aforesaid reasons, this Court comes to the irresistible conclusion that entire service of the Petitioners from the date of initial appointments on daily wages/ad-hoc/temporary basis till the date of permanent appointment/regularization shall be counted as qualifying service for the purpose of pension and they will be deemed to be in service prior to 01.01.2004 and governed by OPS. Needless to state that NPS will be inapplicable to the Petitioners and accordingly, necessary and corrective orders shall be issued by JNU in this regard. (emphasis added)
16. Writ petition is allowed in the aforesaid terms".
12. If we apply the judgement cited supra to the present case, the applicant joined the respondents' organization in the year 1982 and after continuous service he was regularized with effect from 01.07.1986. Therefore, the entire service of the applicant from the date of initial appointment, i.e., 17.08.1982 on temporary basis till the date of regularization should be counted as qualifying service for the purpose of pension.
11. We also find that similar issue was considered by the Hon'ble Supreme Court in the case of S.D. Jayaprakash & Others Vs The Union of India & others, Civil Appeal Nos.....of 2025 (Arising 13 OA 1530/2018 Out of SLP (C) Nos. 19539-19540 of 2021), order dated 29.04.2025, reported in 2025 INSC 594, which held that Rule 17
- Counting of Contractual Service - Persons initially appointed on a contractual basis and subsequently regularised in service without interruption are entitled under Rule 17 of the CCS (Pension) Rules, 1972 to count their prior contractual service period for pensionary benefits, provided they exercise the option under Rule 17(1)(b) to either refund the monetary benefits received for the contract period (like government CPF contribution with interest) or forgo the same if not paid, in lieu of counting such service. The relevant portion of the judgement is extracted below:
8. This rule fell for consideration and interpretation in Sheela Devi (supra), where this Court held that although Rule 2(g) of the Pension Rules excludes contractual employees from their application, Rule 17 applies once such contractual employee is regularised on a later date. The effect is that upon regularisation, the Pension Rules become applicable and Rule 17 requires that past service as a contractual employee is to be taken into account for calculating pension. In this light, and considering that Rule 17 requires the regularised employee to exercise an option to either retain the Government's contribution to Contributory Provident Fund, or to refund such amount or forgo the same if they have not been paid in lieu of counting the service period for which such benefits may have been payable, this Court in Sheela Devi (supra) issued the following directions:
"11. In view of the above reasoning, this court is of the opinion that there is no merit in the appeal however, the following directions are issued: -
(i) The state shall take immediate steps to indicate the mode and manner of exercising option by all the employees concerned (who had been regularized after spells of contractual employment) regardless of the dates on which they were engaged i.e. prior to the year 2003 or subsequently, within a time frame, of within eight weeks from today.
(ii) After receiving the options within the time indicated in the notice, the concerned employee(s) who exercise the relevant options should be notified about the amounts they would have to remit in case any amount towards contribution is required, clearly.
(iii) The options should be processed and completed within eight weeks from the last date of receiving options.
(iv) Time limit for payment too should be indicated and entire process should be completed within four months and all orders fixing pensions or family pension as the case may be, shall be issued."14 OA 1530/2018
9. In light of the clear language of Rule 17 of the Pension Rules as well as its interpretation in Sheela Devi (supra), the contractual service period rendered prior to the appellants' regularisation in 2015 must be counted towards the payment of their pensionary benefits in accordance with the mechanism set out in Rule 17. In line with the directions issued in Sheela Devi (supra) extracted hereinabove, we direct the respondent Union of India to take immediate steps and indicate the mode and manner for the appellants to exercise the option provided under Rule 17 of the Pension Rules as well as to notify the amounts that the appellants would have to remit in case they opt for grant of pension under the Rules.
10. With the above reasoning and directions, we partly allow the present appeals to the extent indicated hereinabove.
11. No order as to costs".
12. From the above it is clear that Persons initially appointed even on a contractual basis and subsequently regularised in service without interruption are entitled under Rule 17 of the CCS (Pension) Rules, 1972 to count their prior contractual service period for pensionary benefits, provided they exercise the option under Rule 17(1)(b) to either refund the monetary benefits received for the contract period (like government CPF contribution with interest) or forgo the same if not paid, in lieu of counting such service.
13. In the light of the above discussion, we are of the considered opinion that the applicant has made out a case for grant of relief. We, therefore, quash and set aside the impugned order dated 19.03.2008, passed by the 3 rd respondent and direct the respondents regularize the service of the applicant from 17.08.1982 to 30.06.1986 and refix the pay with effect date of appointment and consequently grant 3rd MACP with pensionary benefits. The said exercise should be completed within a period of 3 months from the 15 OA 1530/2018 date of receipt of copy of this order.
14. In the result the OA is allowed on the above terms. There shall be no order as to costs.
(Sisir Kumar Ratho) (M. Swaminathan) Member(A) 26.08.2025 Member(J) MT