Punjab State Electricity Board & Anr vs Narata Singh & Anr

3

The appellant No. 1, i.e., Punjab State Electricity Board is

a statutory body constituted under Section 5 of the Electricity

(Supply) Act, 1948. The respondent No.1 was employed on

work charged basis as a special foreman by the Board as a

fresh appointee. He worked in the same capacity from August

6, 1982 to January 5, 1984. With effect from January 6,

1984, he was appointed on regular basis. He retired from the

service of the Board with effect from July 31, 1990 on

attaining the age of superannuation. The respondent No.1

thereafter moved a representation requesting the Board to

grant him pension and other retiral benefits after taking into

account the entire service rendered by him on work charged

basis under the State Government. By an order dated

January 25, 1991, the respondent No.1 was paid a sum of

Rs.29,250/- being the amount payable to him as death-cum-

retirement gratuity. The relevant regulation framed by the

Board provides that an employee who has served for a

minimum period of qualifying service of 10 years would be

entitled to pension. The claim of the Board is that the

respondent No.1 had served the Board for 7 years, 11 months 4 and 25 days including the work charged service in the Board

and was, therefore, not qualified for grant of pension. The

claim of the respondent No.1 was that service rendered by him

in the State of Punjab as work charged employee should be

counted for determining qualifying service for the purpose of

pension. Therefore, he instituted C.W.P. No.10911 of 1991

before the High Court of Punjab and Haryana seeking

inclusion of work charged service for the purpose of

determining qualifying service. A Division Bench of the

Punjab and Haryana High Court at Chandigarh, vide order

dated January 28, 1992, allowed the writ petition of the

respondent No.1 and directed the Board to include work

charged service rendered by the respondent No.1 with the

State of Punjab for the purpose of determining qualifying

service for grant of pension to him. It may be mentioned that

the Board had issued a Finance Circular No.24/92 dated May

29, 1992 deciding to include the period of work charged

service of an employee with the Board for the purpose of grant

of pensionary benefits as well as for counting the said period

for determining qualifying service for grant of pension. 5

Feeling aggrieved by the said decision, the appellants

filed special leave petition (C) No.7515 of 1992 before this

Court. The said petition was allowed by an order dated

October 12, 1992 in the following terms :

"Special Leave granted.

Heard counsel on both sides. The question which is required to be considered is in regard to the service rendered by the respondent No.1 Narata Singh with the Bhakra Management Board and later the Beas Management Board. The question to be considered is whether that service was regulated by the Contributory Provident Fund Scheme and Gratuity Scheme and whether the respondent No.1 had already taken benefit thereof. If so, the effect of that benefit received by the respondent No.1 would have to be considered. It appears that the matter had not been considered from that angle by the High Court. We, therefore, set aside the impugned order of the High Court and remit the matter to the High Court for reconsideration on merit. The appeal is disposed of accordingly. There will be no order as to costs.

Sd/- (A.M. Ahmadi)

Sd/- (M.M. Punchhi)

October 12, 1992 New Delhi."

6 After remand, the case was heard by a learned Single

Judge of Punjab and Haryana High Court. The learned Single

Judge by order dated March, 10, 1995 dismissed the petition

filed by the respondent No.1. Thereupon the respondent No.1

challenged the said judgment by filing a Letters Patent Appeal

No.674 of 1995. During the pendency of the appeal,

respondent No.1 filed an application on August 27, 2004

under Section 151 of the Code of Civil Procedure for bringing

on record certain documents in support of his claim that

service rendered by him in the State of Punjab should be

taken into consideration for the purpose of determining

qualifying service rendered by him in the Board. The record

further shows that he filed another application for bringing on

record certain documents in support of his claim. The

Division Bench of the High Court noticed that those

documents were neither considered by the learned Single

Judge nor by the Board and, therefore, the Division Bench, by

an order dated August 24, 2005, directed the Board to

consider the case of the respondent No.1 for the grant of

pensionary benefits, in the light of new documents filed in the 7 appeal within four months from the date of the order. After

passing the said order, the hearing of the appeal was

adjourned. Pursuant to the directions given by the High

Court, the Board reconsidered the case of the respondent No.1

for grant of pensionary benefits in the light of the documents

produced by him on the record of the appeal and rejected the

said claim by a speaking order dated November 16, 2005. The

order passed by the Board was produced before the Court

hearing LPA No.674 of 1995. The main ground on which the

claim of the respondent No.1 for grant of pensionary benefits

in the light of the new documents was rejected was that the

case of the respondent No.1 was not covered by Regulation

Circular No.54 of 1985 bearing Memo

No.257861/REG.6/Vol.5 dated November 25, 1985 because

he had rendered service in the work charged capacity outside

the Board, i.e., in the Departments of the State Government,

namely, Bhakra Management Board and Beas Management

Board and that the said service was a non-pensionable service

so far as the State Government was concerned. The Division

Bench considered the order dated November 16, 2005 passed 8 by the Board rejecting the claim of the respondent No.1 as well

as Rule 3.17(ii) of the Punjab Civil Services Rules and the Full

Bench decision of the Punjab and Haryana High Court

rendered in Kesar Chand vs. State of Punjab & Ors. [1988 (5)

SLR 27]. The Division Bench noticed that the Full Bench of

the Punjab and Haryana High Court had struck down Rule

3.17(ii) of the Punjab Civil Services Rules which, inter alia,

provided that period of service in work charged establishments

shall not be counted as qualifying service. After noticing the

ratio laid down by the Full Bench, the Division Bench

concluded that Rule which excluded the counting of work

charged service of an employee whose services were

regularized subsequently was bad in law and, therefore, the

conclusion of the Board that the case of the respondent No.1

was not covered by Circular dated November 25, 1985 because

services rendered by him as work charged employee in the

departments of the State Government was non-pensionable

service so far as the Government of Punjab was concerned,

was wrong. In view of the said conclusion, the Division Bench

by the impugned judgment has allowed the claim of the 9 respondent No.1 to include work charged service rendered by

him with the State of Punjab for grant of pension and directed

the Board to count the said period for determining qualifying

service for the purpose of pension, giving rise to the instant

appeal.

3. This Court has heard the learned counsel for the parties

at length and in great detail. This Court has also considered

the documents forming part of the appeal. The argument that

the respondent No.1 had served the Board for 7 years, 11

months and 25 days and was, therefore, not qualified for grant

of pension as he had not put in minimum qualifying service of

10 years, is devoid of merits. It is true that the Board is a

statutory body constituted under Section 5 of the Electricity

(Supply) Act, 1948 and entitled to make regulations in exercise

of power conferred by Section 79 of the said Act. It is also true

that the regulation relating to pension requires that an

employee of the Board must serve for a minimum period of 10

years so as to claim pensionary benefits and that the total

service of the respondent No.1 with the Board is of 7 years, 11

months and 25 days. However, the claim made by the 1 respondent No.1 that previous service rendered by him in

work charged capacity with the State Government should be

taken into consideration for the purpose of determining

qualifying service for grant of pension is rightly upheld by High

Court. It is relevant to notice that there were many cases

where employees who had rendered temporary service under

the State Government were retrenched but later on had

secured employment under the Central Government and

claimed pensionary benefits from the Central Government

wherefrom eventually they had retired. There were also cases

where employees who had rendered temporary service under

the Central Government had secured employment under the

State Government and were claiming pensionary benefits from

the State Government wherefrom eventually they had retired.

Therefore, the question of allocation of pensionary liability in

respect of temporary service rendered under the Government

of India and State Governments was considered by the Central

Government. The Central Government consulted the State

Governments and it was decided that as proportionate

pensionary liability in respect of temporary service rendered 1 under the Central Government or the State Governments to

the extent of such service could have qualified for grant of

pension under the Rules of the respective Government, will be

shared by the governments concerned on a service share

basis, so that the Government servants are allowed the benefit

of counting their qualifying service both under the Central

Government and the State Governments for grant of pension

by the Government from where they eventually retire. This

decision was reflected in letter dated March 31, 1982

addressed by the Under Secretary to Government of India to

the Secretary to Government of all the States Finance

Department (except Government of Jammu and Kashmir and

Nagaland). The abovementioned policy decision taken by the

Central Government was considered by the finance

Department of Government of Punjab. It was decided by the

Government of Punjab that proportionate pensionary liability

in respect of temporary service rendered under the Central

Government/State Government to the extent such service

could have qualified for grant of pension under the rules of

respective Government will be shared by the Government 1 concerned on a service share basis, so that the Government

servants are allowed the benefit of counting their qualifying

service both under the Central Government and the State

Government for grant of pension by the Government from

where they eventually retire. This policy decision taken by the

Government of Punjab is reflected in a letter dated May 20,

1982 addressed to all the Heads of Departments, Registrar,

Punjab and Haryana High Court, Commissioner of Divisions,

District and Sessions Judge and Deputy Commissioners in the

State. The abovementioned policy decisions taken by the

Central Government and the Government of Punjab were

taken into consideration by the Board which issued a Memo

dated November 25, 1985 with reference to the subject of

allocation of pensionary liability in respect of temporary

service rendered in the Government of India and State

Government and adopted the policy decision reflected in the

letter dated May 20, 1982 of the Government of Punjab, with

effect from March, 31, 1982 as per the instructions and

conditions stipulated in the said letter. This is quite evident

from Memo No.257861/8761/REG.6/V.5 dated November 25, 1 1985 issued by the under Secretary/P&R/ for Secretary,

PSEB, Patiala.

4. The effect of adoption of the policy decisions of the

Central Government and the State Government was that a

temporary employee, who had been retrenched from the

service of Central/State Government and had secured

employment with the Punjab State Electricity Board, was

entitled to count temporary service rendered by him under the

Central/State Government to the extent such service was

qualified for grant of pension under the Rules of the Central/

State Government.

5. The short question which arises for determination of this

Court is whether the work charged service rendered by the

respondent No.1 under the Government of Punjab prior to

securing employment with the Board would qualify for grant of

pension under the Punjab Civil Services Rules. This dispute

deserves to be determined because the contention of the

appellant is that the High Court was neither justified in

referring to the definition of "temporary post" as given in

Regulation 3.17(ii) of Punjab Civil Services Rules nor the Full 1 Bench decision in Kesar Chand (supra) but the High Court

should have taken into consideration the definition of

"temporary post" as per Regulation 2.58 of PSEB MSR Vol.I

Part-I, 1972. As noticed earlier, by memo dated 25.11.1985,

the Board adopted letter dated 20.5.1982 of the Department of

Finance, Government of Punjab in order to allocate liability of

pension in respect of temporary service rendered under the

State Government. A bare glance at letter dated 20.5.1982

makes it very clear that allocation of pensionary liability in

respect of temporary service rendered under the Government

of India and the State Government was agreed upon on certain

conditions being fulfilled, one of which was that the period of

temporary service rendered under the Central/State

Government should be such which could be taken into

consideration for determining qualifying service for grant of

pension under the Rules of respective government. In order to

determine whether work charged service rendered by the

respondent No.1 under the State Government could have been

taken into consideration for the purpose of calculating

qualifying service, one has to refer to definition of "temporary 1 post" as defined in Punjab Civil Services Rules and not to the

Rule referred to by the Board. Rule 3.17(ii) of the Punjab Civil

Services Rules reads as under:

"If an employee was holding substantively a permanent post on the date of his retirement, his temporary or officiating service under the State Government, followed without interruption by confirmation in the same or another post, shall count in Full as qualifying service except in respect of :-

(i) ... ... ... ...

(ii) periods of service in work-charged establishment; and"

A bare reading of the above-quoted rule makes it clear

that periods of service in work charged establishments were

not counted as qualifying service. Therefore, the work charged

employees had challenged validity of the said Rule. The

matter was considered by the Full Bench of Punjab and

Haryana High Court. In Kesar Chand vs. State of Punjab &

Ors. [1988 (5) SLR 27], the Full Bench held that Rule 3.17(ii)

of the Punjab Civil Services Rules was violative of Article 14 of

the Constitution of India. The Full Bench decision was

challenged before this Court by filing a special leave petition 1 which was dismissed. Thus, the ratio laid down by the Full

Bench judgment that any rule which excludes the counting of

work charged service of an employee whose services have been

regularized subsequently, must be held to be bad in law was

not disturbed by this Court. The distinction made between an

employee who was in temporary or officiating service and who

was in work charged service as mentioned in Rule 3.17(ii) of

the Punjab Civil Services Rules disappeared when the said

rule was struck down by the Full Bench. The effect was that

an employee holding substantively a permanent post on the

date of his retirement was entitled to count in full as qualifying

service the periods of service in work charged establishments.

In view of this settled position, there is no manner of doubt

that the work charged service rendered by the respondent

No.1 under the Government of Punjab was qualified for grant

of pension under the rules of Government of Punjab and,

therefore, the Board was not correct in rejecting the claim of

the respondent for inclusion of period of work charged service

rendered by him with the State Government for grant of

pension, on the ground that service rendered by him in the 1 work charged capacity outside PSEB and in the departments

of the State Government was a non-pensionable service.

6. The apprehension that acceptance of the case of the

respondent No.1 would result into conferring a status on them

as that of employees of the State of Punjab has no factual

basis. It is true that the State Government has power to frame

rules governing services of its employees under Article 309 of

the Constitution whereas the Board has power to prescribe

conditions of service by framing regulations under Section

79(c) of the Electricity (Supply) Act, 1948. However,

governance of a particular institution and issuance of

instructions to fill up the gap in the fields where statutory

provisions do not operate, is recognised as a valid mode of

administration in modern times. It is not the case of the

Board that it was compelled to adopt the policy of the State

Government. The Board, on its own free volition, had issued

letter adopting the policy of the State Government. Merely

because the employees of the Board like respondent No.1 are

entitled to count period of duty performed by them as work

charged employees in the State Government for the purposes 1 of pension etc., it would not be proper to conclude that they

became the employees of the State of Punjab. In fact, having

larger interest of the employees, the Board had decided to

adopt the policy decision of the State Government which can

never be termed as arbitrary or irrational.

7. The contention, that the two circulars, namely, one dated

March 31, 1982 and another dated May 20, 1982 cover only

the employees of the State Government and the Central

Government and the Board, which is a distinct legal entity

from the State of Punjab, is not covered by the same, is merely

stated to be rejected. It is neither the case of the respondent

No.1 nor the case of the State Government that employees of

the Board are covered by the circulars dated March 31, 1982

and May 20, 1982. However, it is their case that the

employees of the Board were entitled to benefit contemplated

by those two circulars as soon as the policy laid down in those

two circulars was adopted by the Board vide letter dated

November 25, 1985. The effect of adoption of the two

circulars, i.e., one of the Central Government and another of

the State Government is that a work charged employee who 1 has rendered services either under the Central Government or

the State Government would be entitled to count the period of

service so rendered by him for the purpose of claiming

pensionary benefits as an employee of the Board.

8. It is wrong to argue that adoption of circulars by the

Board does not create a reciprocal arrangement between the

Board and the State of Punjab and/or Central Government.

The language of the three circulars is clear and unambiguous

and, therefore, those circulars will have to be interpreted

plainly. The conjoint and meaningful reading of the two

circulars dated March 31, 1982 and May 20, 1982 with

circular dated November 25, 1985 of the Board unequivocally

and clearly creates an arrangement between the Central

Government, State Government and the Board under which an

employee of the Board who had earlier occasion to render

service as a work charged employee either in the Central

Government or in the State Government would be entitled to

count the period of service so rendered, when the question

arises as to whether he has put in qualifying service for grant

of pension by the Board arises. The respondent No.1 has 2 never requested the Board to consider his case for promotion

de hors the circular dated November 25, 1985. Having regard

to the facts of the case, this Court is of the opinion that the

High Court was justified in issuing mandamus as prayed for

by the respondent No.1.

9. The plea that case of the respondent No.1 should have

been rejected because it has financial repercussions is totally

devoid of merits. Before adopting the policy underlying two

circulars, the Board must have taken into consideration the

financial implications as well as demands of the employees

and thereafter must have resolved to adopt those circulars. It

has been brought to the notice of the Court that subsequently

circular dated November 25, 1985 was rescinded by the

Board. However, there is no manner of doubt that those

employees who were covered by the circular dated November

25, 1985 till it was in force would be entitled to claim benefits

under the same.

10. The argument that the respondent No.1 is already given

the benefit of his previous service rendered as work charged

employee under the Board while counting qualifying service for 2 the purpose of pension and would not be entitled to benefit of

memo dated November 25, 1985 adopting policy decisions of

the Government of Punjab because the same was

subsequently cancelled, has no force. It is true that the policy

decision mentioned in memo dated November 25, 1985 was

rescinded by the Board in the year 2004. However, the

Resolution of the year 2004 does not indicate at all, that it is

retrospective in nature nor it is the case of the learned counsel

for the appellants that the Resolution of the year 2004 has

retrospective effect. Therefore, on the basis of the Resolution

of the year 2004, the respondent No.1 cannot be denied the

benefit of counting of previous service rendered by him as

work charged employee under the Government of Punjab for

the purpose of determining qualifying service under the Board

for grant of pension.

11. It was stressed that the service of the respondent No.1

with the Government of Punjab came to an end on April 15,

1978 when he was retrenched whereas after a lapse of more

than four years, he joined the services of the Board on August

6, 1982 and, therefore, the gap being not condonable under 2 Rule 4.23 of the Punjab Civil Services Rules, the claim of the

respondent No.1 should have been rejected, has no substance.

The policy decision of the Board indicates that the benefit of

policy decision of the Government of Punjab was to be

available to an employee of the Board with effect from March

31, 1982. A conjoint and meaningful reading of the memo

dated November 25, 1985 issued by the Board and the policy

decision of the Government of Punjab as reflected in letter

dated May 20, 1982 of the Department of Finance makes it

more than clear that the benefit would be admissible to one

who having been retrenched from the service of the State

Government, secured on his own, employment under the

Board either with or without interruption between the date of

retrenchment and date of new appointment. There is no

manner of doubt that the respondent No.1 was retrenched

from the service of the State Government. This fact is not only

admitted in the list of events supplied by the learned counsel

for the appellant but is also mentioned in the impugned

judgment. The record shows that on his own, the respondent

No.1 secured employment under the Board with interruption 2 between the date of retrenchment and date of new

appointment. Therefore, it is wrong to argue that the

respondent No.1 having joined service of the Board after a

lapse of more than four years from the date on which he was

retrenched by the State Government would not be entitled to

the benefit of the memo dated November 25, 1985.

12. It was contended that the additional documents

produced by the respondent No.1 before the court in appeal

could not have been taken into consideration and, therefore,

the impugned judgment should be set aside. It is true that

the documents which were sought to be relied upon at the

appellate stage were not produced by the respondent No.1

before the learned Single Judge who had decided the writ

petition filed by him. However, there is no manner of doubt

that those documents were brought on record by filing

applications which were allowed. The order allowing the

applications was never challenged by the appellants before the

higher forum. The appellants, by their conduct, had permitted

the said order to attain finality. As those documents were

neither considered by the learned Single Judge nor by the 2 Board, the Division Bench had directed the Board to

reconsider the claim of the respondent for pension by

inclusion of service rendered by him as work charged

employee under the State Government. That direction was

accepted and implemented by the appellants by considering

the case of the respondent No.1 in the light of new documents.

Thereafter, the claim of the respondent No.1 was rejected by a

speaking order and the speaking order was produced before

the Court. The Court had thereafter heard the learned

counsel for the parties and, thus, the appellants were given

sufficient opportunity to meet with the case of the respondent

No.1 based on new documents. The existence of the

documents relied upon by the respondent No.1 at the

appellate stage was never disputed by the appellants. On the

facts and in the circumstances of the case, this Court is of the

firm opinion that neither the appellants were taken by

surprise when the respondent No.1 produced new documents

which were considered by the Court nor any prejudice was

caused to them. Therefore, consideration of new documents

by the Court does not have any vitiating effect on the ultimate 2 decision of the Court.

13. The learned counsel for the appellants pointed out the

finding recorded by the Division Bench in the impugned

judgment to the effect that "we are, therefore, clearly of the

opinion that the work charged service of the appellant with the

Board must be counted for determining qualifying service for

the purpose of pension" and argued that the judgment of the

High Court should not be construed to mean as giving

direction to the appellant to include previous service rendered

by the respondent No.1 as work charged employee of the State

Government for pension purposes. So far as this argument is

concerned, it is true that the Division Bench of the High Court

has expressed the above opinion in the impugned judgment.

However, the reference to Rule 3.17(ii) of the Punjab Civil

Services Rules as well as the Full Bench decision of the Punjab

and Haryana High Court in Kesar Chand vs. State of Punjab &

Ors. [1988 (5) SLR 27] and speaking order dated November 16,

2005 passed by the Board rejecting the claim of respondent

No.1 makes it abundantly clear that the High Court has

directed the appellants to count the period of service rendered 2 by the respondent No.1 in work charged capacity with the

State Government for determining qualifying service for the

purpose of pension. Further, the respondent No.1 has been

directed to deposit the amount of Employee's Contributory

Fund which he had received from the appellants along with

interest as per the directions of the Board before the pension

is released to him. All these directions indicate that the High

Court had come to the conclusion that the period of service

rendered by the respondent No.1 in work charged capacity

under the State Government should be taken into

consideration for determining qualifying service for the

purpose of pension. Non-mention of such direction in the

impugned judgment is merely a slip and the appellants cannot

derive any advantage from this.

14. The net result of the above discussion is that this Court

does not find substance in any of the arguments advanced on

behalf of the appellants. The appeal lacks merit and,

therefore, deserves to be dismissed. Therefore, the appeal fails

and is dismissed. There shall be no order as to costs. 2

15. The appellants are directed to implement the directions

given by the High Court in the impugned judgment as early as

possible and not later than three months from the date of

receipt of the writ of this Court.

.................................J. [J.M. Panchal]

.................................J. [K.S. Radhakrishnan]

New Delhi;

February 23, 2010.