S.D. Jayaprakash And Ors. Etc vs The Union Of India

2025 INSC 594 REPORTABLE

IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION

CIVIL APPEAL Nos. OF 2025 ARISING OUT OF SLP (C) Nos. 19539-19540 OF 2021

S.D. JAYAPRAKASH AND ORS. ETC. ...APPELLANT(S)

VERSUS

THE UNION OF INDIA & ORS. …RESPONDENT(S)

JUDGMENT

PAMIDIGHANTAM SRI NARASIMHA, J.

1. Leave granted.

2. These appeals arise from the Karnataka High Court’s order

dated 23.03.2021 1 by which it held that the appellants, who were

initially appointed on contractual basis and subsequently

regularised, will not be entitled to seniority, service benefits, and

pension for the period of their contractual service. Upon

consideration of the relevant rules and the decision of this Court

in State of H.P. v. Sheela Devi, 2 we have partly allowed the present Signature Not Verified Digitally signed by KAPIL TANDON Date: 2025.04.29 18:42:44 IST Reason: 1 In W.P. No. 4712/2016 (S-CAT) c/w W.P. No. 4714/2016 (S-CAT). 2 2023 SCC OnLine SC 1272.

1 appeals and directed the respondent, i.e., Union of India to grant

pensionary benefit to the appellants in accordance with law.

3. The short facts that are necessary are as follows. The

appellants were appointed as Data Entry Operators under the Plan

Scheme called ‘Rationalisation of Data Processing Facilities’ on

temporary and contractual basis between 1996 and 1999.

Pursuant to an order of the Central Administrative Tribunal 3 dated

01.04.2013 4, the respondents issued an Office Memorandum

dated 05.01.2015 to regularise the appellants’ service from a

prospective date, i.e., from the date of issuance of this order.

Pursuantly, the appellants were appointed on a regular basis by

order dated 01.04.2015, w.e.f. 05.01.2015. The appellants

preferred an Original Application before the CAT, with a prayer to

regularise their services from the date of initial appointment or at

least from the date of completing 10 years of service, and to protect

their pay and to grant seniority, service benefits and pension by

counting their period of contractual service. The CAT allowed the

same by order dated 19.01.2016 and directed as follows:

“31. Therefore, after considering the entire facts and circumstances of the case, we order as follows:

3 Hereinafter “CAT”.

4 In O.A. No. 339/2011 before CAT, Bangalore. The High Court upheld the same in W.P. Nos. 57381/2013 (S- CAT) and connected matters by order dated 22.04.2014.

2 1. The pay and other allowances drawn by the applicants prior to their appointment on regular basis on 1.4.2015 shall be protected and they shall be allowed the pay being drawn by them immediately prior to their regularisation as their basic pay as on 1.4.2015. Their annual increment shall be determined accordingly.

2. The applicants from whose salary, the GPF and other contributions made right from the date of their appointment on contract basis shall be entitled to come under the old pension scheme and the entire period of service right from the date of initial appointment on contract basis shall be counted towards pensionary benefits.

3. For the purpose of seniority, ACP and other service benefits etc., the regular service of the applicants shall be reckoned from the date of completion of 10 years of service from their initial appointments on contract basis.

32. The Respondents are directed to fix the salary of the applicants and grant the consequential benefits in terms of the above direction within a period of two (2) months from the date of receipt of a copy of this order.”

4. The respondents challenged the above order by way of a writ

petition, which was partly allowed by the impugned order. The

High Court set aside the CAT’s directions to the extent of counting

the period of contractual service for grant of seniority, service

benefits, and pension on the ground that the initial appointment

was on a contractual basis and not pursuant to the

recommendation of the Staff Selection Commission. It held that

the appellants will be entitled to regularisation and its

consequential benefits only from 01.04.2015. However, the Court

upheld the CAT’s direction regarding protection of pay while fixing

the pay scale.

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5. We have heard Mr. MC Dhingra, learned senior counsel for

the appellants. He relied on this Court’s decision in Sheela Devi

(supra) to contend that as per Rule 17 of the Central Civil Services

(Pension) Rules, 1972 5, the appellants would be entitled to

pensionary benefits by including the period of contractual service. On the other hand, Mr. Vatsal Joshi, learned counsel for the

respondents has sought to differentiate Sheela Devi (supra) only

on the ground that the initial appointment in this case was not

against sanctioned posts.

6. Before commencing our analysis, it is necessary to note the

scope of prayers made before the CAT and High Court, and before

this Court. The prayer before the CAT is for regularisation with

retrospective effect, protection of pay, and grant of seniority and

service and pension benefits by counting the period of contractual

service. Pursuant to the High Court’s impugned order dated

23.03.2021, only the appellants’ pay has been protected while

their prayers for seniority, service and pension benefits by

including the contractual period have been rejected. The

submissions before this Court have been limited to the grant of

pensionary benefits by including the contractual period, through

5 Hereinafter “Pension Rules”.

4 reliance on the decision in Sheela Devi (supra). The issues relating

to grant of retrospective regularisation, seniority and service

benefits during the contractual period have not been argued before

us. We are therefore confining ourselves to the issue of pension.

7. 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.”

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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. 6 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.

6 Sheela Devi (supra), para 9.

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(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.”

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 arising from SLP (C) Nos. 19539-19540/2021 and

set aside the impugned order of the High Court dated 23.03.2021

in W.P. No. 4712/2016 (S-CAT) c/w W.P. No. 4714/2016 (S-CAT)

to the extent indicated hereinabove.

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11. No order as to costs.

12. IA Diary No. 44115/2025 for bringing on record LRs of

appellant no. 21 is allowed. Pending applications, if any, stand

disposed of.

………………………………....J. [PAMIDIGHANTAM SRI NARASIMHA]

………………………………....J. [JOYMALYA BAGCHI]

NEW DELHI;

APRIL 29, 2025

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