News: Indian government employees who resign are ineligible for pension: SC

Employee Relations

Indian government employees who resign are ineligible for pension: SC

The pension rules apply to government servants, including civilian government servants in the defence services, appointed before December 31, 2003.
Indian government employees who resign are ineligible for pension: SC

Under the Central Civil Services Pension Rules (CCS Pension Rules), a government employee cannot claim pension after resigning from job. The employee forfeits his/her past service upon resignation, consequently disentitling him/her to pension, according to the rule.

Recently, while deciding a case related to the resignation of an employee of electricity company BSES Yamuna Power Limited, the Supreme Court made a distinction between voluntary retirement and resignation. 

Ghanshyam Chand Sharma vs Delhi Power Company

Appointed as a daily rated mazdoor on 9 July 1968, Ghanshyam Chand Sharma’s services were regularised after he got the post of a peon on 22 December 1971. Later, on 7 July 1990 he resigner and his resignation was accepted by the appellant (BSES Yamuna Power Ltd) with effect from 10 July 1990. However, Sharma was denied pension on two grounds:

He had not completed twenty years of service.

He had forfeited his past services by resigning and therefore could not claim pensionary benefits.

Unsatisfied with the company’s decision, Sharma challenged the order in Delhi High Court, which  ruled in favour of the employee on the grounds that he had completed 20 years of service and his resignation should, therefore, be treated as voluntary retirement. But then, BSES went in appeal to the Supreme Court. 

SC's take

The Supreme Court observed, “The decision to resign results in the legal consequences that flow from a resignation under the applicable provisions."

“These consequences are distinct from the consequences flowing from voluntary retirement and the two may not be substituted for each other based on the length of an employee’s tenure.”

The Supreme Court, hence, noted that Sharma had resigned from service after his application for voluntary retirement was rejected on the grounds that he had not completed 20 years of service.

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Topics: Employee Relations

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