Government employees who Resigned from the service are not entitled for Pension

Kritika Pandey | Maharaja Sayajirao University of Baroda | 1st January 2020

BSES Yamuna Power Ltd. Vs. Sh. Ghanshyam Chand Sharma & Anr, C.A. No. 9076 of 2019

FACTS:

• The respondent was appointed as a daily rated mazdoor on 9 July 1968. He was promoted to Peon on 22 December 1971.The respondent tendered his resignation on 7 July 1990, which was accepted by the appellant with effect from 10 July 1990.
• The respondent was subsequently denied pensionary benefits by the appellant on two grounds. First, he had not completed twenty years of service, making him ineligible for the pension. Second, by resigning the respondent had forfeited his past services and could not claim pensionary benefits.
• If by resigning, the respondent forfeited his past service then the question of whether he has completed twenty years of service is rendered irrelevant for such service would stand forfeited.
• In deciding whether the respondent’s letter of resignation would amount to ‘voluntary resignation’, the High Court of Delhi relied on the judgement in Asger Ibrahim Amin Vs. LIC (2016) 13 SCC 797.
• In Asger Ibrahim Amin, the appellant had resigned in 1991 after completing 23 years of service with the LIC. When the appellant resigned, there were no provision allowing for voluntary retirement. The Central Government subsequently promulgated the Life Insurance Corporation of India (Employees) Pension Rules 1952, setting out the conditions to be fulfilled for the grant of pension upon retirement and permitting, the employees to voluntarily retire after 20 years of service.
• Under the LIC Pension Rules, pension on retirement was made retrospectively applicable to employees retiring prior to 1995, however, the provisions regarding voluntary retirement were not.The LIC Pension Rules also stipulated that resignation amounted to a forfeiture of past service.
• In deciding whether the appellant was entitled to pension under the LIC Pension Rules, Justice Vikramajit Sen held in Sheelkumar Jain Vs. New India Assurance Co.Ltd. (2011) 12 SCC 197 that the court will have to construe the statutory provisions in each case to find out whether the termination of service of an employee was a termination by way of resignation or by way of voluntary retirement and while construing the statutory provisions, the court will have to keep in mind the purpose of the statutory provision. The appellant ought not to have been deprived of pension benefits merely because he styled his termination of service as “resignation” or because there was no provision to retire voluntarily at that time.
• In the present case, the High Court of Delhi relied on the decision in Asger Ibrahim Amin (supra) to held that the respondent was entitled to pensionary benefits. The respondent had completed more than 20 years of service and would have been eligible for pension upon voluntary retirement.
• Learned Senior Counsel for the appellant, brought to our attention that the Asger Ibrahim Amin had been overruled in Senior Manager, LIC Vs. Shree Lal Meena (2019) 4 SCC 479.
• In Shree Lal Meena, the respondent employee had resigned after completing 20 years of service. The court was called upon to determine whether the respondent’s “resignation” amounted to a forfeiture of his past service dis entitling him from pension or was in fact “voluntary retirement”.
• The court interpreted that “When the Pension Rules are applicable, and an employee resigns, the consequences are forfeiture of service, under Rule 23 of the Pension Rules. As suppose, the Pension Rules, were applicable and the employee was in service and sought to resign, the entire past service would be forfeited, and consequently, he would not qualify for pensionary benefits. It imply that an employee resigning during the currency of the Rules would be deprived of pensionary benefits, while an employee who resigns before the Rules were in existence, would be given the benefit of these Rules.”
• The Court in Shree Lal Meena (supra) distinguish between resignation and voluntary retirement:

Voluntary retirement and resignation involve voluntary acts of employee to leave service. One of the distinctions is that in case of resignation it can be tendered at any time, but in the case of voluntary retirement, it can only be sought for after rendering the prescribed period of qualifying service. Another distinction is that in case of the former, normally retrial benefits are denied but in case of the latter, the same is not denied. In case of the former, permission or notice is not mandated, while in the case of the latter, permission of the employer concerned is a requisite condition.

ISSUE:

Whether the Government employees who ‘voluntarily retired’ and not ‘resigned’ from the service are entitled for Pension?

HELD:

• Even if the respondent had served twenty years, under Rule 26 of the CCS Pension Rules his past service stands forfeited upon resignation. The respondent is therefore not entitled to pensionary benefits.
• Allow the appeal and set aside the impugned order of the High Court of Delhi.