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Ram Dia And Others v. Uttar Haryana Bijli Vitran Nigam Ltd. (Uhbvnl) And Another
Factual and Procedural Background
The petitioners, originally appointed as work-mates on a daily-wage basis in 1980–1981, were regularized as work-mates in 1993 and later promoted (two petitioners were promoted to Assistant Lineman in 1999 and 2002). They retired on superannuation in 2002–2003. Because they had less than ten years of regular service as required under the Punjab Civil Services Rules (as adopted by Uttar Haryana Bijli Vitran Nigam Limited), the period spent on daily-wage/work-charge service was not counted towards pensionary and other terminal benefits.
After representations and a legal notice were unsuccessful, the petitioners filed a writ petition. This Court earlier disposed of a related writ by directing the respondents to decide the legal notice within four months and to record reasons if the claim was denied. The respondents thereafter rejected the petitioners' claim by order dated 13-2-2004 (Annexure P4), stating that work-charge service followed by regular appointment is not countable towards pensionary benefits where the employee had not submitted an option within three months of a circular dated 6-8-1993 (or from the date of regularisation) and had not refunded the employees' contributory provident fund with interest.
The petitioners challenged Annexure P4 seeking: (a) a writ in the nature of mandamus directing the respondents to count the period of daily-wage/work-charge service along with regular service for pensionary benefits; and (b) a writ of certiorari to quash the impugned order dated 13-2-2004.
Legal Issues Presented
- Whether the period of service rendered by the petitioners on daily-wage/work-charge basis prior to regularisation is to be counted as qualifying service for pensionary and other terminal benefits.
- Whether the impugned order (Annexure P4) denying pensionary benefits for lack of a timely option under the circular dated 6-8-1993 is legally sustainable.
- What is the effect of the circular dated 6-8-1993 and the requirement to refund employee provident fund contributions (with interest) for an employee to opt for pensionary benefits after regularisation.
Arguments of the Parties
Petitioners' Arguments
- The period spent by the petitioners as daily-wage/work-charge employees prior to regularisation should be counted as qualifying service for pension and other terminal benefits.
- The controversy is covered by precedent (including the Full Bench decision in Kesar Chand and the judgment in Nathi Ram v. State of Haryana), which support counting pre-regularisation work-charge service for pensionary purposes.
- The petitioners are illiterate and did not have the circular (dated 6-8-1993) noted in writing by them; they were therefore unaware of the requirement to submit an option within three months. They were always willing to opt for the pension scheme and to have their work-charge service counted.
- Reliance was placed on the Court's earlier decision in Lilu Ram v. State of Haryana (CWP No. 2476/1997) to support the position regarding notice/option and the petitioners' lack of awareness of the circular.
Respondents' Arguments
- The petitioners had less than ten years of regular service, and thus could not be granted pensionary benefits as prescribed under the applicable rules.
- By Government notification and the circular dated 6-8-1993 (adopting the Government of Haryana notification of 4-9-1992 and an amendment to Civil Services Rules Vol. II, Rule 3.17), service rendered in a work-charge capacity could be counted toward qualifying service only if the employee submitted an option within three months from regularisation or from the date of issue of the circular; and, if opting for pensionary benefits, the employee had to refund the entire employee contribution to EPF with interest in lump sum.
- Where an option was not given within the stipulated period, it was to be presumed the employee intended to continue as an EPF member and not to be governed by pensionary rules.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| Kesar Chand v. State of Punjab, 1989 (II) RSJ 629 : [1988 (5) SLR 27 (Pb. & Hry.)] (Full Bench) | Held that once services of a work-charged employee have been regularized, prior service should be counted for pension; sub-rule (ii) of rule 3.17 declared violative of Article 14. | The Court relied on this Full Bench decision as a primary authority establishing that pre-regularisation work-charged service must be reckoned for pensionary benefits and that excluding such service is arbitrary. |
| Joginder Singh v. State of Haryana, (1998) 1 SCT 795 : [1999 (4) SLR 214 (Pb. & Hry.)] | Struck down the words “half the period of service of such persons paid from contingency” in sub-clause (i) of clause (f) of rule 3.17A. | The Court cited this decision to show that rule provisions which reduced or limited counting of prior service were invalid and to reinforce the principle of full reckoning of qualifying service where appropriate. |
| Hazura Singh v. State of Punjab, 2003 (4) RSJ 336 : [2004 (2) SLR 719 (Pb. & Hry.)] | Reiterated the view that service in work-charged capacity prior to regularisation is to be counted for pensionary purposes. | Used by the Court to show consistent judicial authority reinforcing that pre-regularisation work-charge service qualifies as pensionable service. |
| Nasib Singh v. The State Of Punjab & Ors., 1999 (4) RSJ 244 : [1999 (5) SLR 497 (Pb. & Hry.)] | Reiterated the same principle regarding counting of prior work-charged service. | Cited by the Court as part of a line of authorities supporting the conclusion that pre-regularisation work-charge service must be accounted for in computing pensionary benefits. |
| Nathi Ram v. State of Haryana, C.W.P No. 15535 of 1997 (decided 17-9-1998) (reported (1999) 1 SCT 338) | Relied upon by the petitioners as supporting entitlement to pension by counting prior work-charge service. | The Court acknowledged this judgment as one of the authorities covering the controversy and forming part of the established view favouring counting of earlier service. |
| Lilu Ram v. State of Haryana, CWP No. 2476 of 1997 (decided 9-10-1997) | Relied on by petitioners' counsel in support of the argument regarding lack of effective notice/option (as to the circular) and consequences of illiteracy or absence of proof that the circular was noted. | The Court noted counsel's reliance on this decision while assessing whether there was material showing the circular had been noted by the petitioners; the lack of such material weighed in petitioners' favor. |
Court's Reasoning and Analysis
The Court proceeded by hearing counsel and examining the record. The analysis followed these main steps:
- The Court reviewed factual chronology: appointment on daily-wage/work-charge basis, regularisation in 1993, promotions, and retirement dates; and noted that petitioners had less than ten years of regular service.
- The Court examined the statutory/regulatory framework: the Punjab Civil Services Rules (Volume II), in particular Rule 3.17 and related provisions including Rule 3.17A and Rule 4.23, together with the Government of Haryana notification and the circular dated 6-8-1993 (adopted by the erstwhile Haryana State Electricity Board).
- The Court surveyed relevant precedents, giving special weight to the Full Bench decision in Kesar Chand and subsequent decisions (Joginder Singh, Hazura Singh, Nasib Singh, Nathi Ram). These authorities had held or reiterated that service rendered in work-charged/daily-wage capacity prior to regularisation must be reckoned as qualifying service for pension and gratuity, and had struck down rule provisions that arbitrarily limited such counting.
- Considering the rules and precedents together, the Court concluded that it is a well established principle that the period of service rendered on daily-wage/work-charge prior to regularisation is liable to be counted for the purpose of gratuity and pension, especially where the employee was a whole-time worker and wages were paid on a monthly basis.
- The Court then addressed the respondents' reliance on the circular dated 6-8-1993 requiring an option within three months and, if an employee opted for pensionary benefits, refund of EPF contributions with interest. The respondents argued that, in the absence of a timely option, it must be presumed the employee wished to remain under EPF.
- The petitioners countered that they were illiterate, never had the circular noted in writing, and therefore had no knowledge of the requirement to submit an option. The Court observed that the respondents failed to produce material to show that the circular had been actually noted in writing by the petitioners. In the absence of such material, the Court accepted that the petitioners likely had no knowledge of the options called by the respondents under the circular.
- Balancing the established legal principle (counting pre-regularisation service) against the procedural requirement in the circular, and on the facts that: (a) petitioners were whole-time employees paid on a monthly basis, and (b) there was no evidence the circular had been noted by them, the Court found it unreasonable to deny the pensionary benefits.
- Accordingly, the Court quashed Annexure P4 and directed the respondents to permit the petitioners to exercise their option under the circular dated 6-8-1993 within one month of receipt of certified copy of the order and to give consequential benefits within two months thereafter, subject to fulfilment of eligibility conditions under that circular.
Holding and Implications
Core Ruling: Petition allowed; Annexure P4 dated 13-2-2004 quashed.
Direct consequences ordered by the Court:
- The respondents are directed to permit the petitioners to exercise their option under the circular dated 6-8-1993 within one month of receipt of a certified copy of the Court's order.
- Upon exercise of the option and subject to eligibility under the circular, the respondents shall grant consequential pensionary and other terminal benefits within two months thereafter.
The opinion does not expound broader policy ramifications beyond the immediate directions to the parties. The decision applies established principles from earlier authorities to the petitioners' factual circumstances and results in the quashing of the administrative order that denied counting of pre-regularisation service.
Nirmal Yadav, J.:— The petitioner have sought a writ under Articles 226/227 of the Constitution of India in the nature of mandamus directing the respondents to count the period of service rendered by them on daily wage basis along with regular service, for granting pensionary benefits, and have also prayed for issuance of a writ in the nature of certiorari for quashing the impugned order dated 13-2-2004 (Annexure P4) denying pensionary benefits to the petitioners.
2. The petitioners were appointed as work mate on daily-wage basis in the years 1980 and 1981. Their services were regularized as work mate in the year 1993. Petitioners No. 1 and 2 were promoted as Assistant Line Men on 6-6-2002 and 4-11-1999, respectively. The petitioners have retired from service on attaining the age of superannuation in the years 2002 and 2003. All the three petitioners have less than 10 years regular service to their credit for availing pensionary benefits as required under the Punjab Civil Services Rules, applicable to the State of Haryana, which have been adopted by the Uttar Haryana Bijli Vitran Nigam Limited. Since the period spent on daily wage service was not counted towards pensionary and other terminal benefits, in spite of petitioners submitting representations and legal notice (Annexure P2), they filed Civil writ Petition No. 16514 of 2003. The aforesaid writ petition was disposed of by this court by issuing a direction to the respondents to take a decision on the legal notice within four months from the date a certified copy of the order is received by them, in case the claim of the petitioner is denied, the reasons thereof would be given in the order itself. In compliance of the order of this Court, the respondents have disposed of the legal notice rejecting the petitioner's claim vide order Annexure P4, holding that workcharge service followed by regular appointment is not countable towards pensionary benefits in case where the employee had not submitted his option within three months of the circular dated 6-8-1993 or from the date of regularisation for availing of pensionary benefits and did not refund the entire amount of employees contributory provident fund along with interest thereon. The petitioners have challenged the impugned order on the ground that service rendered by them on daily wage/work-charge basis is liable to be counted for pensionary and other terminal benefits and they are entitled for grant of pension in view of the decision of this Court in C.W.P No. 15535 of 1997 titled as Nathi Ram v. State of Haryana, decided on 17-9-1998. [Reported in (1999) 1 SCT 338 (Pb. & Hry.)]. The respondents have filed reply stating that the petitioners have rendered less than 10 years regular service and as such, they cannot be granted pensionary benefits as prescribed under the rules. In view of the notification issued by the Government of Haryana No. V2 (55) 88-2FR-II dated 4-9-1992 and adopted by the erstwhile Haryana State Electricity Board vide Memo No. Ch. 9.Pen/G-43/93 dated 6-8-1993 and on account of amendment of Civil Services Rules Volume-II, Rule 3.17, the service rendered in the capacity of work-charge could be counted towards qualifying service subject to the condition that an employee had submitted the option within a period of three months from the date of regularization or from the date of issue of the aforesaid circular. In case he/she had opted for pensionary benefits, he/she had to refund the entire amount of employees contribution towards EPF along with interest thereon.
3. We have heard the learned counsel for the parties and perused the material on record.
4. Learned counsel for the petitioners argued that petitioner Nos. 1 to 3 were appointed as work mate on daily-wage basis on 6-1-1981, 1-9-1981 and 1-7-1981 and their services were regularized with effect from 1-5-1993, 4-5-1993 and 1-7-1993, respectively. Petitioner Nos. 1 and 2 were promoted as Assistant Lineman on 4-11-1999 and 6-6-2002 and continued as such upto 31-12-2002 and 31-1-2003 when they retired from service on attaining the age of superannuation. Petitioner No. 3 retired on attaining the age of superannuation on 30-6-2002. He further argued that the controversy in hand is squarely covered by a Full Bench judgment of this Court in Kesar Chand v. State of Punjab, 1989 (II) RSJ 629 : [1988 (5) SLR 27 (Pb. & Hry.)] as well as by the judgments of this court in Joginder Singh v. State of Haryana, (1998) 1 SCT 795 : [1999 (4) SLR 214 (Pb. & Hry.)], Hazura Singh v. State of Punjab, 2003 (4) RSJ 336 : [2004 (2) SLR 719 (Pb. & Hry.)], Nasib Singh… v. The State Of Punjab & Ors.…, 1999 (4) RSJ 244 : [1999 (5) SLR 497 (Pb. & Hry.)] and Nathi Ram v. State of Haryana, C.W.P No. 15535 of 1997 decided on 17-9-1998. (supra).
5. In Kesar Chand's case (supra), the Full Bench while dealing with a similar controversy held as under:—
“Once the services of a work-charged employee have been regularized, there appears to be hardly any logic to deprive him of the pensionary benefits as are available to other public servants under Rule 3.17 of the Rules. Equal protection of laws must mean the protection of equal laws for all persons similarly situated. Article 14 strikes at arbitrariness because a provision which is arbitrary involves the negation of equality. Even the temporary or officiating service under the State Government has to be reckoned for determining the qualifying service. It looks to be illogical that the period of service spent by an employee in a work-charged establishment before his regularisation has not been taken into consideration for determining his qualifying service. The classification which is sought to be made among Government servants who are eligible for pension and those who started as workcharged employees and their services regularized subsequently, and the others is not based on any intelligible criteria and, therefore, is not sustainable at law. After the services of a work-charged employee have been regularized, he is a public servant like any other servant. To deprive him of the pension is not only unjust and inequitable but is hit by the vice of arbitrariness and for these reasons the provisions of sub-rule (ii) of rule 3.17 of the Rules have to be struck down being violative of Article 14 of the Constitution.”
6. It would also be relevant here to refer to rule 3.17A and 4.23 of the Punjab Civil Services Rules, Volume (2), which read as under:—
“3.17(A) (I) Subject to the provisions of rule 4.23 and other rules and expect in the cases mentioned below, all service rendered on establishment, interrupted or continuous, shall count as qualifying service;—
(i) Service rendered in work-charged establishment.
(ii) Service paid from contingencies.
Provided that after 1st January. 1973 half of the service paid from contingencies will be allowed to count towards pension at the time of absorption in regular employment subject to the following conditions:—
(a) Service paid from contingencies should have been in a job involving whole-time employment (and not part-time or for a portion of the day).
(b) Service paid from contingencies should have been in a type of work or job for which regular post could have been sanctioned e.g Malis, chowkidars, Khalasis etc.
(c) The service should have been one for which the payment is made either on monthly or daily rates computed and paid on a monthly basis and which though not analogous to the regular scale of pay should bear some relation in the matter of pay to those being paid for similar jobs being performed by staff in regular establishment.
(d) The service paid from contingencies should have been continuous and followed by absorption in regular employment without a break.
(iii) Casual or daily rated service.
(iv) Suspension adjudged as a specific penalty.
3.17A (2) An interruption in the service of a Government employee caused by wilful absence from duty or unauthorized absence without leave, shall entail forfeiture of the past service,
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4.23 In the absence of a specific indication to the contrary in the service record, an interruption between two spells of service rendered under the State Government shall be treated as automatically condoned, and the pre-interruption service shall be treated as qualifying service for pension purposes, except where the interruption has been caused by resignation, dismissal or removal from service or due to participation in a strike, but the period of interruption itself shall under no circumstances be reckoned as qualifying service for pension purposes.”
7. The aforesaid view was further reiterated by this court in the cases of Hazura Singh and Nasib Singh (Supra). In Joginder Singh's case (supra), it has been held as under:—
“I am therefore, of the opinion that the words “half the period of service of such persons paid from contingency” occurring in sub-clause (i) of clause (f) of rule 3.17A are bad in law and are, accordingly, struck down.”
8. A conjoint reading of the rules, quoted above and the observations of this Court would reveal that it is by now well established that period of service rendered on daily-wage/work-charge prior to regularisation of service is liable to be counted for the purpose of gratuity and pension.
9. In view of the above, we are of the view that service rendered by the petitioners on daily-wage/work-charge basis should be counted as qualifying service for pensionary and other terminal benefits. The petitioners were working as a whole-time employee and were paid wages on monthly basis. Therefore, the period of service rendered by them on daily-wage/work-charge basis has to be reckoned while computing their pensionary and other terminal benefits.
10. Faced with the aforesaid situation counsel for the respondents, argued that as per circular dated 6-8-1993, an employee had to submit an option within a period of three months from the date of regularisation or from the date of issue of circular whichever is later, as to he/she intends to avail the pensionary benefits or to continue to be a matter of EPF. If the option was not given, within the stipulated period of three months, it was to be presumed that he/she intended to continue to be a member of EPF and in case, he/she opted for pensionary benefits, then he/she had to refund the entire amount of the employee contribution towards provident fund along with interest thereon in lumpsum for crediting the same to the Board's account for onward credit to his/her GPF account.
11. Learned counsel for the petitioner vehemently argued that petitioners are illiterate and no such circular as pointed out by the respondents, was got noted from them. The petitioners were always desirous and willing to opt for the pension scheme by counting the work-charge/daily-wage service. In support of his arguments, the learned counsel relied on a judgment of this Court in the case of Lilu Ram… v. State Of Haryana…., CWP No. 2476 of 1997, decided on 9-10-1997. The learned counsel for the respondents failed to show any materia that the circular dated 6-8-1993 was actually got noted in writing from the petitioners. In the absence of any such material, it can well be inferred that the petitioner had no knowledge about the options called by the respondents vide the aforesaid circular. Therefore, it is unreasonable to deny the pensionary benefits to the petitioners. Accordingly, the writ petition is allowed. The order at Annexure P4, dated 13-2-2004 is quashed. The respondents are directed to allow the petitioners to exercise their option in accordance with their circular dated 6-8-1993 within a period of one month of receipt of a certified copy of this order and give them the consequential benefits within two months thereafter subject to their fulfilling the conditions of eligibility for being governed under the aforesaid circular dated 6-8-1993.
12. Petition allowed.
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