Whether the services rendered by the appellants under the Adult Education and Non-Formal Education Project1 cannot be counted under a Government scheme for the purpose of pensionary benefits after the appellants were appointed by the State.?

REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NOS. 505-531 OF 2020
(ARISING OUT OF SLP (CIVIL) NOS. 27922-27948 OF 2017)
PARMESHWAR NANDA ETC. …..APPELLANT(S)
VERSUS
THE STATE OF JHARKHAND THROUGH CHIEF
SECRETARY & ORS. ETC. …..RESPONDENT(S)
W I T H
CIVIL APPEAL NOS. 532-542 OF 2020
(ARISING OUT OF SLP (CIVIL) NOS. 32135-32145 OF 2017)
CIVIL APPEAL NO. 543 OF 2020
(ARISING OUT OF SLP (CIVIL) NO. 852 OF 2018)
CIVIL APPEAL NO. 544 OF 2020
(ARISING OUT OF SLP (CIVIL) NO. 4380 OF 2019)
A N D
CIVIL APPEAL NOS. 545-546 OF 2020
(ARISING OUT OF SLP (CIVIL) NOS. 4698-4699 OF 2019)
J U D G M E N T
HEMANT GUPTA, J.
Civil Appeal Nos. 505-531 of 2020
Civil Appeal Nos. 532-542 of 2020
Civil Appeal Nos. 543 of 2020
1
A N D
Civil Appeal Nos. 545-546 of 2020

  1. The present appeals are directed against an order passed by the
    Full Bench of High Court of Jharkhand on 16th June, 2017 wherein it
    has been held that the services rendered by the appellants under
    the Adult Education and Non-Formal Education Project1
    cannot be
    counted under a Government scheme for the purpose of
    pensionary benefits after the appellants were appointed by the
    State.
  2. Briefly, the facts are that the appellants were appointed under the
    Project, co-sponsored by the Central Government and the State
    Government, in the erstwhile undivided State of Bihar between the
    period 1978 to 1990. Some of the appellants were appointed as
    Adult Education Supervisors whereas other appellants were
    appointed in the ministerial cadre such as Stenographer, Clerk cum
    Accountant, Clerk cum Typist, Peon as well as Drivers. The
    appellants were working under the Project during the bifurcation of
    the State and their services fell in the successor State of Jharkhand
    which was formed on 15th November, 2000. The Government of
    India vide policy decision dated 1st April, 2001 closed the Project.
    The Government of Jharkhand, consequent to the bifurcation of
    State of Bihar, declared the employees to be surplus w.e.f. 16th
    May, 2001.
    1 for short, ‘Project’
    2
  3. The Government of Jharkhand issued a notification dated 30th May,
    2007 for absorption of the employees engaged in the Project in the
    Departments of Food, Public Distribution and Consumer Affairs,
    Finance, Social Welfare, Women and Child Development, Urban
    Development etc. on different posts, in their respective prescribed
    scales of pay. A perusal of the said notification shows that there
    were 756 employees who were declared as surplus and were to be
    absorbed by the State. It appears that most of the surplus
    employees were absorbed in different scales of pay vide letter of
    appointments starting from 24th July, 2007 except those who had
    attained the age of superannuation or had died prior to such
    absorption.
  4. As per Clauses 11 and 12 of the notification dated 30th May, 2007,
    the surplus employees absorbed were to be treated as new
    appointments and the services rendered by them prior to their
    declaration as surplus i.e. prior to 15th May, 2001, would not be
    counted for the purpose of their seniority and pay protection.
    Clauses 11 and 12 of the notification read as under:
    “11. The adjustment of surplus personnels will be
    considered new appointment and being surplus on the
    basis of prior service, they will not be benefitted of
    seniority.
  5. These surplus personnels will not be benefitted by
    pay protection.”
  6. 59 writ petitions came to be filed claiming pensionary benefits and
    seniority before the High Court. The matter was placed before the
    3
    Full Bench in view of the divergence of opinions of the two Division
    Benches of the Jharkhand High Court in State of Jharkhand &
    Ors. v. Bhubneshwar Mahto
    2
    and State of Jharkhand & Ors. v.
    Bimal Kumar Sinha
    3
    .
  7. LPA No. 515 of 2004 was preferred by the State against the order of
    the learned Single Bench passed on 21st November, 2003. The writ
    petitioner was directed to be paid salary for the period 16th May,
    2001 to 31st July, 2001 i.e. the date of his retirement. The writ
    petitioner was ordered to be treated as a regular employee of the
    State, having been appointed on 10th December, 1968, much
    before the Project started in the year 1978. LPA No. 188 of 2004
    was preferred by the State against the order of the learned Single
    Bench. In the appeal, it was held that the writ petitioner therein
    was appointed under the Project which was abolished on the
    specific condition that past service rendered by him will not be
    taken into account. Such writ petitions were categorized into three
    groups by the Full Bench. The first group of petitions were from
    those employees who had retired after being declared surplus w.e.f.
    16th May, 2001 but before they were absorbed pursuant to the
    notification dated 30th May, 2007. In this category, some of the
    writ petitioners were legal heirs of those employees who had died
    during this period before being absorbed. The second group of
    petitions were from those employees who were declared surplus
    but were absorbed by the Government of Jharkhand vide
    2 LPA No. 515 of 2004
    3 LPA No. 188 of 2004
    4
    notification dated 30th May, 2007 and had retired thereafter. The
    third group of petitions were from those employees who were
    working on the date of filing of the writ petitions, after being
    absorbed by the Government of Jharkhand vide the aforementioned
    notification. The employees in writ petitions comprising of
    Categories I and II claim pensionary benefits whereas the writ
    petitions filed in Category III claim seniority by taking into
    consideration their past services rendered under the Project
    resulting into payment of pension after attaining the age of
    superannuation.
  8. The common challenge in all the writ petitions were to clauses 11
    and 12, as reproduced above. It was the stand of the writ
    petitioners that they are being treated as fresh appointees and
    their past service has not been counted for the purposes of
    seniority or fixation of their initial salary.
  9. The High Court in the impugned order referred to Jharkhand
    Pension Rules to hold that the following three conditions are
    required to be satisfied before the service can be treated to be
    pensionable service-
    (i) Service must be under Government.
    (ii) Employment must be substantive and permanent.
    (iii) Service must be paid by Government.
  10. Rule 59 provides that the State Government can declare any
    specific kind of service rendered in a non-gazetted capacity to
    qualify for pension even though either or both of conditions (1) and
    5
    (2) are not fulfilled. The High Court held that no declaration of the
    State Government in general terms has been made nor any
    direction in individual cases issued in favour of any such
    petitioners.
  11. Before this Court, learned counsel for the appellants referred to
    Circular issued by the State Government under Rule 59 of Bihar
    Pension Rules, 1950 which would be applicable in the State of
    Jharkhand after its bifurcation in terms of State Reorganization Act.
    The Circular dated 12th August 1969 reads thus:
    “Regarding: – Declaration of a temporary service
    of a Government Servant who is not confirmed as
    pensionable.
    Under the existing pension rules, a temporary
    Government servant if not confirmed in any point, is not
    entitled to pension unless his services are declared
    pensionable under Rule 59 of the Bihar Pension Rules.
  12. There are a large number of temporary Government
    servants employed under different Schemes which are
    in existence for the last 15-20 years and it will cause
    hardship to them if they are not allowed pension after
    their retirement.
  13. The State Government after careful consideration
    have, therefore, been pleased to decide that if the
    service of the temporary or officiating government
    servant who is not confirmed in any post is continuous
    and is more than 15 years, it will be considered as
    pensionable under rule 59 of the Bihar Pension Rules.
  14. These orders will be applicable to government
    servants retiring on or after 12 August, 1969.”
  15. The argument is that the issue relating to arrears of salary for the
    period 16th May, 2001 till the date of the absorption of the
    6
    employees under notification dated 30th May, 2007 stands
    concluded by an order passed by this Court in State of Jharkhand
    & Ors. v. Asgar Ali & Ors.
    4
    , therefore, the appellants are entitled
    to consequential benefits of pension.
  16. On the other hand, the argument of learned counsel for the
    respondents is that the said Circular was not referred to by the
    appellants before the High Court and rightly so, as such Circular is
    not applicable to the employees engaged under Central
    Government sponsored project. Still further, it is the temporary or
    officiating service of a Government servant which is to be
    considered as pensionable under Rule 59 of the Rules. Since the
    employees engaged under the Project were not discharging duties
    as temporary or officiating Government servants, therefore, such
    Circular will not be applicable to them. It is, thus, argued that the
    view of the Full Bench of the Jharkhand High Court does not
    warrant any interference in the present appeals.
  17. Before we consider the respective arguments of the learned
    counsel for the parties, some of the statutory provisions of
    Jharkhand Pension Rules are required to be reproduced:
    “Rule 31:- Permanent post means a post carrying a
    definite rate of pay and sanctioned without limit of
    time.
    Rule 38:- Substantive pay means the pay other than
    special pay, personal pay or emoluments classed as pay
    by the Provincial government under rule 26(a)(iii) to
    which a government servant is entitled on account of a
    4 Special Leave to Appeal (Civil) CC Nos. 10361-10364 of 2014 decided on 18th July,
    2014.
    7
    post to which he has been appointed substantively or
    by reasons of his substantive position in a cadre.
    Rule 40:- Temporary post means a post carrying a
    definite rate of pay and sanctioned for a limited time.
    CHAPTER III
    GENERAL PROVISIONS RELATING TO GRANT OF PENSION
    SECTION-1-GENERAL
    Rule 58:- The service of Government servant does not
    qualify for pension unless it conforms to the following
    three conditions:-
    First-The service must be under Government.
    Second-The employment must be substantive and
    permanent.
    Third-The service must be paid by Government.
    Rule 59:- The Provincial Government may, however, in
    the case of service paid from general revenues, even
    though either or both of conditions (1) and (2) are not
    fulfilled-
    (1) declare that any specified kind of service rendered
    in a non-gazetted capacity shall qualify for pension.
    (2) in individual cases, and subject to such conditions as
    it may think fit to impose in each case, direct that
    service rendered by a Government servant shall count
    for pension.
    Rule 60:- The service of a Government servant does not
    qualify unless he is appointed and his duties and pay
    are regulated by the Government, or under conditions
    determined by the Government. The following are
    examples of Government servants exclude from
    pension by this rule;
    (1) Employees of a municipality,
    (2) Employees of grant-in-aid schools and institutions.
    (3) Service on an establishment paid from the house
    hold allowance of the Governor or from his contract
    establishment allowance.
    Rule 61:- Service does not qualify unless the
    Government servant holds substantively a post on a
    permanent establishment.
    Rule 74:- Services which satisfied the conditions
    8
    prescribed in sub-sections (2) and (3) qualifies, or does
    not qualify, according to the source from which it is
    paid; with reference to this rule, service is classified as
    follows:-
    (a) Paid from the general revenues.
    (b) Paid from local funds.
    (c) Paid from funds in respect to which the Government
    hold the position of trustee.
    (d) Paid by fees levied by law, or under the authority of
    the Govt. or by commission.
    (e) Paid by the grant, in accordance with law and
    custom, of a tenure in land, or of a source of income, or
    right to collect money.
    Rule 103:- An interruption in the service of a
    Government servant entails forfeiture of his past
    service, except in the following case:-
    (a) Authorised leave of absence.
    (b) Unauthorized absence in continuation of authorized
    leave of absence so long as the post of the absentee is
    not substantively filled; if his post is substantively filled,
    the past service of the absentee is forfeited.
    (c) Suspension, where it is immediately followed by
    reinstatement whether to the same or to a different
    post, or where the Government servant dies or is
    permitted to retire or is retired while under suspension.
    (d) Abolition of the post or loss of appointment owing to
    reduction of establishment.
    (e) Transfer or non-qualifying service in an
    establishment under Government Control. The transfer
    must be made by a competent authority; a Government
    servant who voluntarily resigns qualifying service
    cannot claim the benefit of this exception. Transfer to a
    grant-in-aid school entails forfeiture.
    (f) Time occupied in transit from one appointment to
    another provided that the Government servant is
    transferred under the orders of competent authority, or,
    if he is a non-gazetted Government servant with the
    consent of the head of his old office.”
  18. Before this Court, 3 writ petitioners are in appeal falling in category
    I, 18 falling in category II and 6 falling in category III.
  19. In the order under appeal, the claim of the employees for pension
    9
    was declined for the reason that no declaration within the meaning
    of Rule 59(1) in general terms has been made nor any direction in
    individual cases issued in their favour. The High Court relied upon
    judgment of this Court reported as Dhyan Singh & Ors. v. State
    of Haryana & Ors.
    5
    . The High Court also held that judgment of
    Single Bench of Patna High Court in Baliram Singh & Ors. v.
    State of Bihar & Ors.
    6
    is per incuriam. The High Court concluded
    as under:
    “The foregoing discussion therefore makes it clear that
    past services of these petitioners/employees were
    under the centrally sponsored scheme known as Adult
    Education/Non-formal Education/Mass Education Project
    which was abolished w.e.f. 1.4.2001 by the Central
    Government and consequently w.e.f. 15.5.2001 by the
    Government of Jharkhand. Appointment of these
    petitioners/employees under such a scheme/project
    therefore, cannot be treated as under regular
    establishment of the Government on a permanent and
    substantive post. Moreover, their pay and allowances
    were borne by the grant-in-aid released by the Central
    Government from time to time. That is the reason why
    their services were treated as surplus once the Central
    Government closed the scheme w.e.f. 1.4.2001.
    Petitioners have failed to controvert the aforesaid
    position on facts.”
  20. The judgment in Baliram Singh has attained finality with the
    judgment of this Court reported as State of Bihar & Ors. v.
    Baliram Singh & Ors.
    7
    . In the aforesaid case, the policy decision
    of absorbing the writ petitioners appointed under the Project
    contained a clause that the candidates will be treated as fresh
    appointments and that the earlier services rendered by them shall
    5 (2002) 10 SCC 656
    6 2016 SCC OnLine Pat 9958
    7 (2018) 18 SCC 46
    10
    be calculated for their pension. The writ petitioners before the
    Patna High Court claimed back wages from the date of their
    termination till the date they were absorbed. This Court declined
    the claim of back wages. The Court held as under:
    “18. In the present case, however, the respondents
    have neither challenged the termination order after
    closure of the Non-Formal Education Scheme with effect
    from 1-4-2001 nor the policy dated 20-5-2005 under
    which they have been appointed or the appointment
    letter dated 16-3-2007. Even the appointment letter
    dated 16-3-2007 unambiguously predicates that the
    appointment was a fresh appointment and the past
    services would be reckoned only for the purpose of
    grant of pension and nothing more. Indisputably, the
    respondents acted upon such terms and conditions of
    appointment without any demurrer. They chose to file
    the subject writ petition only in the year 2013, when the
    cause of action first arose on 1-4-2001, then on 20-5-
    2005 and once again, on 16-3-2007. Unless the
    respondents are to be reinstated in their previous post
    (held prior to 1-4-2001), the question of awarding back
    wages would not arise at all. The relief of back wages is
    and can be linked only to the order of reinstatement. It
    cannot be awarded in isolation or, for that matter,
    during the period when the respondents were not in
    employment at all.”
  21. The case of Dhyan Singh was in respect of appointments under
    the Project in the State of Haryana. The services of the employees
    were discharged upon abolishing of the aforementioned Project.
    The employees invoked the writ jurisdiction of the court claiming
    fixation of their salary by taking past service and for pension. This
    Court declined such claim and held as under:
    “…..The continuance/engagement of the appellants
    under the specific scheme cannot be held to be an
    employment under any establishment of the
    Government. Such schemes are taken up for
    certain contingencies when money for the same is
    11
    provided either by the Central Government or at
    times by some foreign countries. But the
    employment under such scheme not being a part
    of the formal cadre of the State Government, it is
    difficult to hold that the period for which an
    employee rendered service under such scheme can
    be counted either for the purposes of deciding their
    pensionary benefits or even for fixing of their
    salary in the scale of pay once they are regularly
    absorbed.”
  22. In the present case, Clause 11 of the notification dated 30th May,
    2007 issued by Government of Jharkhand is to the effect that
    absorption of the surplus personnel will be considered as new
    appointments and they will not be granted benefit of seniority on
    the basis of their past service. Neither will such past service
    entitle them to such pay protection. One of the appointment
    letters appointing 65 candidates as Project Officers was issued on
    20th December, 2007. Such appointment letter had following
    clauses which read as under:
    “4. Adjusted employees shall be covered under the old
    Pension Scheme. Their service period prior to
    retrenchment shall be counted for the purpose of
    pension. Period of retrenchment shall not be counted
    for the purpose of pension.
  23. Adjustment of above surplus Project Officers shall be
    considered as fresh appointment and benefit of
    seniority on the basis their service rendered prior to
    becoming surplus shall not be admissible to them.”
    The appointment letters to the other employees is on similar lines.
  24. The argument of the learned counsel for the appellants is that the
    policy decision of the State, vide notification dated 30th May, 2007
    12
    only denies them the benefit of seniority or pay protection but not
    of their past service being counted towards pensionary benefits. It
    is contended that in terms of Rule 59 of the Rules, the State
    Government has declared that the services rendered by a
    temporary Government servant employed under different schemes
    would be entitled to pension after the completion of 15 years of
    service.
  25. The entire case is based upon Rule 59 of the Rules and the Circular
    dated 12th August, 1969 of the erstwhile State of Bihar. We do not
    find any merit in the arguments raised by the learned counsel for
    the appellants. Rule 59 of the Rules empowers the State
    Government to declare any specified kind of service rendered by
    one in a non-gazetted service to qualify for pension, provided, that
    the salary is paid from the general revenue. Rule 58 of the Rules
    contemplates the conditions that are required to be satisfied for
    services to be pensionable. Herein, as it has been reiterated before,
    first condition is that the service must be under the Government;
    second, that it must be substantive and permanent; and third, that
    it must be paid by the Government.
  26. The appellants were appointed under a specific Scheme i.e. the
    Project. Such project was not a permanent establishment of the
    Government as it was meant for a specific purpose funded by the
    Central Government for a specified period. The appointment of the
    appellants under the Project is not a part of any cadre of the State
    13
    Government. Therefore, the first condition of Rule 58 that the
    service rendered must be under the State Government is not
    satisfied by the appellants having been appointed under the
    Project. The second condition that employment must be
    substantive and permanent is again not satisfied by the appellants
    as the employment of the appellants was under the Project. A
    permanent post in terms of Rule 31 of the Rules means a post
    carrying a definite rate of pay and that is sanctioned without a time
    limit. The appointment of the appellants under the project was not
    in a pay scale nor was it sanctioned without a time limit. Further,
    substantive pay is defined in Rule 38 of the Rules as a person who
    is appointed in a cadre. At best, the appellants satisfied only the
    third condition i.e. that they were paid by the Government.
  27. If the first and second conditions mentioned in Rule 58 of the Rules
    are not satisfied, the State Government can declare any specified
    kind of service rendered in a non-gazetted capacity to qualify for
    pension. The Circular dated 12th August, 1969 deals with
    pensionary benefits to a temporary Government servant. The
    appellants were never appointed by the Government either on a
    temporary or on permanent basis. The appellants were engaged
    under the Project i.e. a scheme, therefore, the benefit of such a
    Circular cannot be claimed by the appellants. Still further, sub-rule
    (1) of Rule 59 of the Rules empowers the State to declare any
    specific kind of service to qualify for pension. The notification for
    absorption circulated on 30th May, 2007 and the subsequent letter
    14
    of appointments do not contain any condition that the services
    rendered by the appellants under the Project shall qualify for
    pension. The policy decision contemplates that it is a fresh
    appointment and no benefit either of seniority or pay protection
    shall be given. The appellants have not disputed such condition of
    appointment having been appointed under such policy decision
    vide the notification dated 30th May, 2007. The Circular has not
    granted pensionary benefits. In the absence of any specific
    condition in the Circular to grant pensionary benefits, it is not
    possible to read that pensionary benefits are to be granted to the
    erstwhile employees of the Project. The appellants cannot turn
    around to say that the services rendered by them under the Project
    shall be counted for pension. The Circular dated 12th August, 1969
    is not even remotely applicable to the employees appointed under
    the Project as the very nature of the appointment was for a specific
    purpose and not for an unlimited period of time.
  28. The case of Baliram Singh arises out of the policy of the State of
    Bihar wherein the past service has been specifically ordered to be
    considered for pension. Since in the State of Jharkhand, the policy
    decision is to treat them as fresh appointments without any benefit
    of seniority and pay protection, therefore, to count the period when
    the appellants were working under a Project as pensionable service
    is beyond comprehension. The appellants have been appointed as
    fresh candidates and, therefore, their period of service for pension
    has to be calculated from the date of their regular appointment and
    15
    therefore they cannot get any benefit of past service rendered by
    them.
  29. Learned counsel for the appellants have referred to an order
    passed by this Court in Asgar Ali & Ors. v. State of Jharkhand
    & Ors.
    8
    wherein the direction of the High Court for payment of
    arrears was not interfered with. It is contended that since the
    appellants have been paid salary for the period prior to their
    regular appointment, the appellants would be entitled to pension
    as well.
  30. The Single Bench of the Jharkhand High Court in a judgment
    reported as Asgar Ali dealt with a prayer for absorption and for
    payment of arrears of salary from 16th May, 2001, i.e. when the
    employees were rendered as surplus, till January, 2008, i.e. the
    date of their absorption, in Writ Petition No.729 of 2004. The
    learned Single Bench vide order dated 4th January, 2010, directed
    the state for the payment of salary for the reason that the services
    of the employees under the Project were not retrenched, therefore,
    the employees were entitled to their salary. In such petition the
    employees had made no claim for counting of past services for the
    purposes of pensionary benefits. As against such order of the
    learned Single Judge, the state sought LPA No.533 of 2012 which
    was dismissed vide order dated 1st October, 2013. Thereafter the
    State sought a Special Leave Petition which was also dismissed
    with a direction to make phased payments of salary to the writ
    8 2010 SCC OnLine Jhar 8
    16
    petitioners/employees. Again, no claim for counting of past
    services for the purposes of pension was made or allowed by the
    Court. It was merely a monetary benefit which was granted on
    account of no formal order of retrenchment being passed against
    the employees employed under the Project.
  31. Since the appellants were absorbed as fresh appointees without
    pay protection and seniority, as a consequence thereof, they will
    not be entitled to count their past service rendered under the
    Project for the purpose of pension. We, thus, do not find any error
    in the order passed by the High Court which may warrant
    interference in the present appeals. Accordingly, the appeals are
    dismissed.
    Civil Appeal No. 544 of 2020
  32. The present appeal is directed against an order passed by Division
    Bench of the High Court of Patna on 20th June, 2018 whereby LPA
    No.189 of 2018 filed by the State was dismissed relying upon an
    order passed by the Single Bench in CWJC No. 20780 of 2010 and
    CWJC No. 20801 of 2010 on 19th April, 2011 wherein referring to
    Rule 103 of Bihar Pension Rules, 1950, it was held that an
    interruption in service on account of the abolition of a post shall not
    entail forfeiture of the past service of a Government servant, i.e.
    the intervening period can be counted for pensionary benefits. In
    view of the said fact, the State was directed to consider the writ
    petitioners as continuing in service between 1992 and 1998 solely
    17
    for the purpose of granting personal monetary benefits. The
    petitioners were not to be entitled to payment of salary for the
    period in any manner and neither claim any seniority over other
    Government servants.
  33. After the aforesaid judgments, Baliram Singh along with others
    filed CWJC No. 22208 of 20139
    to claim back wages for the period
    from 1st October, 2001 to 3rd July, 2007. The learned Single Bench
    allowed the writ petition on 22nd August, 2016. Thereafter, LPA No.
    2307 of 2016 was dismissed on 15th January, 2018. The said orders
    were set aside by this Court in Baliram Singh. Therefore, the
    reliance of the High Court on an order passed at earlier stage on
    Baliram Singh no longer holds good. It may be noticed that in the
    State of Bihar, past services rendered by employees under the
    Project were taken into consideration for pensionary benefits. In
    view of the said fact, the present appeal is disposed of in the same
    terms as in Baliram Singh.

………………………………………J.
L. NAGESWARA RAO
………………………………………J.
(HEMANT GUPTA)
NEW DELHI;
FEBRUARY 07, 2020.
9 2016 SCC OnLine Patna 9958 decided on 22nd August, 2016.
18