REPORTABLE

IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION

CIVIL APPEAL No.7159 of 2014

DELHI TRANSPORT CORPORATION ….Appellant

versus

BALWAN SINGH & ORS. ….Respondents

J U D G M E N T

SANJAY KISHAN KAUL, J.

1. The  respondents  are  all  ex-employees  of  the  appellant/Delhi

Transport Corporation (for short ‘DTC’), who availed of the Voluntary

Retirement Scheme (for short ‘VRS’).  The respondents have, however,

been held disentitled to pension on account of exclusion of period when

they remained absent without authorisation for which period they were

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held not entitled to salary.  In D.T.C. v. Lillu Ram,1 such exclusion was

upheld  with  the  consequence  that  the  ex-employees  would  not  get

pensionary benefits, having not completed 10 years of qualifying service.

In the present appeal, two Hon’ble Judges of this Court, after examining

Lillu Ram’s2 case opined that a reconsideration by a larger Bench, of that

view, was required.  As a sequitur, the present appeal has been placed

before us.

2. A perusal of the reference order dated 9.11.2016, shows that the

disagreement  with  the  view  taken  in  Lillu  Ram3 case  emanated  on

various accounts: (a) if the employee has been sanctioned leave without

pay,  why  such  period  should  be  treated  as  a  period  of  unauthorised

absence; (b) non-consideration of relevant rules such as Rules 27 & 28 of

the Central Civil Services (Pension) Rules, 1972 (hereinafter referred to

as the ‘Pension Rules’) and FR 17-A of the Fundamental Rules; (c) no

adverse  effect  should  be  visited  on  the  employee  to  receive  pension,

unless  given  notice  by  the  appropriate  authority,  by  an  entry  in  the

service book or through other notice, that his absence will be treated as

unauthorised absence and will not be counted towards qualifying service 1(2017) 11 SCC 407 2 (supra) 3 (supra)

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for pension; (d) the VRS is permissible only on completion of 10 years of

service and, thus, it may be unjust and harsh to inflict the employee with

adverse consequences, in the absence of such notice.

3. The relevant facts for determination of the issue before us are that

the  employees  of  the  appellant-Corporation  were  governed  by  the

Employees  Contributory Provident  Fund Scheme.   In  terms of  Office

Order No.16 dated 27.11.1992, the introduction of a pension scheme in

DTC  as  applicable  to  the  Central  Government  employees  was

announced,  on  sanction  having  been  obtained  from  the  Central

Government.  This pension scheme was to be operated by the LIC on

behalf  of  DTC  and  the  date  of  effect  of  the  pension  scheme  was

retrospective, w.e.f. 3.8.1981, with the option to the existing employees

and those who retired w.e.f. 3.8.1981 to opt for this pension scheme or

continue to be governed by the Employees Contributory Provident Fund

Scheme.  Prospectively, the pension scheme was to apply compulsorily.

The retired employees, however, were required to refund the employer’s

share  under  the  Employees  Provident  Fund Act,  in  the  event  of  their

opting for the pension scheme.

4. It  appears  that  despite  all  intentions,  the scheme that  had to be

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operated  by  LIC  was  not  implemented  till  1995,  when  it  was

implemented by the appellant-Corporation itself.  The other development

in proximity to the announcement of the scheme was the announcement

of the VRS on 3.3.1993.  In order to avail of this Scheme, the eligibility

conditions required an employee to have completed 10 years of service in

the appellant-Corporation, or completed 40 years of age.  Sub-clause (g)

of Clause 4 of the Scheme provided for pensionary benefits as per Office

Order No.16 dated 27.11.1992.

5. It  appears  that  considerable  litigation ensued in  respect  of  both

these aspects, on various accounts, inter alia on the issue of the eligibility

for pension for persons who had put in 10 years or more of qualifying

service,  but  less  than  20 years.   All  these  different  issues  have  been

settled in proceedings before the Delhi High Court or before this Court.

Suffice to say that there is no controversy now, in view of the judicial

pronouncements that  there is no embargo in the pension rules that an

employee having put in more than 10 years of service but less than 20

years would earn pro rata pension if he avails of the VRS.

6. Insofar as the present controversy is concerned, it appears that the

Delhi  High Court  opined in  favour  of  the employees  and SLPs were

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dismissed leaving the question of law open till the appellant-Corporation

pointed out that the question of law needed to be settled, in view of a

large  number  of  cases  coming  up  on  this  aspect.   It  is  in  these

circumstances  that  the  issue  was  examined  in  Lillu  Ram’s4 case.   A

reference was made to Rule 3(1)(q) of the Pension Rules, which reads as

under:

“3. Definitions: In these rules, unless the context otherwise requires –  

(1) (a) to (p) xxxx xxxx xxxx xxxx

(q) ‘Qualifying Service’ means service rendered while on duty or otherwise  which shall  be taken into account  for  the purpose  of pensions and gratuities admissible under these rules;”

7. It was opined that since the leave availed of was treated as absence

from duty in an unauthorised manner, that period ought not to be counted

towards  the  “qualifying service”  as  the  very  definition  of  “qualifying

service” means service rendered while on duty or otherwise.  Since the

Pension Rules had been adopted,  the provisions of  the Pension Rules

would have to be applied for determining the eligibility.  A reference was

also made to Rule 49(1) of the Pension Rules, which reads as under:

“49. Amount of Pension:

4 (supra)

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(1) In the case of a Government servant retiring in accordance with the provisions of these rules before completing qualifying service of ten years, the amount of service gratuity shall be calculated at the  rate  of  half  month’s  emoluments  for  every  completed  six monthly period of qualifying service.”

The conclusion, thus reached was that absence without sanction is

unauthorised leave, which would have to be excluded from the period

of  qualifying  service,  for  determining  the  period  of  10  years  of

qualifying service for admissibility of pension, and that when a person

is entitled to seek VRS on completion of  10 years of service,  that

would not  ipso facto imply that  this period would also have to be

counted for purposes of admissibility of pension.

8. On  behalf  of  the  appellant-Corporation,  Ms.  Avnish  Ahlawat,

learned counsel sought to draw sustenance for her argument from Rule

21, which reads as under:

“21.    Counting of periods spent on leave

All leave during service for which leave salary is payable [and all extraordinary leave granted on medical certificate] shall count as qualifying service :

Provided  that  in  the  case  of  extraordinary  leave  [other  than extraordinary leave granted on medical certificate], the appointing

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authority may, at the time of granting such leave, allow the period of that leave to count as qualifying service if such leave is granted to a Government servant –

(i) omitted.

(ii) due to his inability to join or rejoin duty on account of civil commotion; or

(iii) for prosecuting higher scientific and technical studies.”

9. It was, thus, her contention that when the Rule itself is clear that

the counting of period for pension, in respect of leave availed of, would

be admissible only where “leave salary is payable,” and there are only

two exceptions as stipulated in the proviso, it was not for this Court to

add or subtract from the Rule.

10. She  further  contended  that  reference  to  Rules  27  & 28  of  the

Pension Rules would not be appropriate as those provisions dealt with

the effect of interruption in service and condonation of interruption in

service.  The Rules read as under:

“27.    Effect of interruption in service

(1)    An interruption in the service of a Government servant entails forfeiture of his past service, except in the following cases:- (a) authorized leave of absence;

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(b)  unauthorized absence  in  continuation of  authorized leave of absence so long as the post of absentee is not filled substantively;

(c) suspension, where it is immediately followed by reinstatement, whether in the same or a different post, or where the Government servant dies or is permitted to retire or is retired on attaining the age of compulsory retirement while under suspension;

(d) transfer to non-qualifying service in an establishment under the control of the Government if such transfer has been ordered by a competent authority in the public interest;

(e) joining time while on transfer from one post to another.

(2)Notwithstanding  anything  contained  in  sub-rule  (1),  the [appointing authority] may, by order, commute retrospectively the periods of absence without leave as extraordinary leave.

28.    Condonation of interruption in service

(a) In the absence of a specific indication to the contrary in the service book, an interruption between two spells of civil service rendered by a Government servant under Government including civil service rendered and paid out of Defence Services Estimates or Railway Estimates shall be treated as automatically condoned and the pre-interruption service treated as qualifying service.

(b)  Nothing in  Clause  (a)  shall  apply to  interruption caused by resignation, dismissal or removal from service or for participation in a strike.

(c) The period of interruption referred to in Clause (a) shall not count as qualifying service.”

11. The contention,  thus,  was  that  an interruption  in  service  would

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entail forfeiture of past service, unless it fell within clauses (a) to (e) of

sub-rule (1) of Rule 27 of the Pension Rules.

12. FR 17-A of the Fundamental Rules also deals with unauthorised

absence without prejudice to the provisions of Rule 27 of the Pension

Rules but none of those provisions would apply in the facts of the present

case.

13. On the other hand, learned counsel for the respondents sought to

draw  our  attention  to  the  Government  of  India  decision  M.F.,  O.M.

No.F.11 (3)-E. V (A)/76 dated 28.2.1976, reproduced as “Government of

India’s decisions” set out just below Rule 21 of the Pension Rules, which

reads as under: “GOVERNMENT OF INDIA’S DECISIONS

(1)     Need  for  making  proper  entries  for  treatment  of extraordinary leave for pensionary benefits. - Under Rule 21 of the  CCS (Pension)  Rules,  1972,  extraordinary  leave  granted  on medical certificate qualifies for pension. The Appointing Authority may, at the time of granting extraordinary leave,  also allow the period of such leave to count as qualifying for pension if the leave is granted to a Government servant –

(i) due to his inability to join or rejoin duty on account of civil commotion, or

(ii) for prosecuting higher technical and scientific studies.

Extraordinary  leave  taken  on  other  grounds  is  treated  as  non-

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qualifying and,  therefore,  a  definite  entry  is  to  be  made in  the service  records  to  that  effect.  Entries  regarding  service  being qualifying or  otherwise  are  required to  be made simultaneously with  the  event.  Even  where  this  is  not  done,  it  should  still  be possible  to  rectify  the  omission  during  the  period  allowed  for preparatory  action,  i.e.,  from  two  years  in  advance  of  the retirement date up to eight months before retirement. At the end of that  period,  however  (i.e.,  when  the  actual  preparation  of  the pension  papers  is  taken  in  hand),  no  further  enquiry  into  past events  or  check  of  past  records  should  be  undertaken.  Specific entries in the service records regarding non-qualifying periods will be taken note of and such periods excluded from the service. All spells of extraordinary leave not covered by such specific entries will be deemed to be qualifying service.”

14. Learned counsel emphasised that a definite entry is required to be

made  in  the  service  record  latest  by  8  months  before  retirement.  All

spells of extraordinary leave not covered by such specific entry would be

deemed to be qualifying service.

15. Learned  counsel  also  drew  our  attention  to  SR  200  of  the

Supplementary Rules (hereinafter referred to as the ‘SR’), which reads as

under:

“S.R.  200.  Every  period  of  suspension  from  employment  and every other interruption of service must be noted, with full details of its duration, in an entry made across the page of the Service Book and must be attested by the Attesting Officer.  It is the duty of  the  Attesting  Officer  to  see  that  such  entries  are  promptly made.”

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16. Learned counsel also referred to the Government of India Order

No.  M.F.,  O.M.  No.F.18  (7)-E.  V (B)/65-Part-V dated  24.6.1966,  the

relevant extract of which reads as under:

“Government of India’s Orders

(1) Annual verification of services. -  

xxxx xxxx xxxx xxxx

NOTE  2. – Questions affecting pension or the pensionable service of  a  Government  servant  which  for  their  decision  depend  on circumstances known at the time, should be considered as soon as they arise and should not be left over for consideration until the Government servant retires or is about to retire.  Definite decisions should be arrived at on all such questions in consultation with the Audit  Officer  and/or  the Accounts  Officer,  as  the case may be, where  necessary  and  recorded  in  the  Service  Book  quoting reference to the orders of the Competent Authority.

…. …. …. …. …. ….”

(2) Need for proper maintenance of Service Book to eliminate delay in payment of pension. –

xxxx xxxx xxxx xxxx

3. The orders of the Competent Authority regarding the counting or otherwise of periods of extraordinary leave or periods preceding breaks  in  service  as  qualifying  for  pension  should  be  obtained invariably at the same time as the occasion arises and not later. Such  orders  should  be  noted  in  the  Service  Book.   Unless otherwise shown in the Service Book, it will be presumed that the orders of Competent Authority have been obtained and the periods of extraordinary leave and periods preceding break in service will

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count for pension.

…. …. …. …. …. ….”

17. Learned  counsel,  thus,  emphasised  the  importance  of  every

interruption  of  service  required  to  be  noted  with  full  details  of  its

duration, and its entry made in the service book, as also the inadvisability

of  consideration  of  question  affecting  pension  or  pensionable  service

being left until the Government servant retires or is about to retire.

18. Learned counsel also contended that possibly, the respondents may

not have availed of the VRS had they been told that they would not get

the  benefit  of  pension  in  view  of  what  is  stated  aforesaid  by  the

appellant-Corporation, and to deprive them subsequently of it would be

unfair and unjust, apart from it being an adverse decision made without

notice to them.

19. We  have  examined  the  contentions  of  learned  counsel  for  the

parties and the judgment in Lillu Ram’s5 case and the order of reference

dated 9.11.2016.

5 (supra)

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20. In our view, the only aspect which is required to be considered is

the requirement of the specific rule of the Pension Rules, which provides

for admissibility of pension.  No one, including the respondents can be

permitted to  plead that  they would be unaware of  the Pension Rules,

which have a statutory force and whose benefit they seek to avail.  In

fact, the VRS itself, more specifically clause (g), makes these very Rules

applicable.  Rule  21  is  quite  clear  in  its  terms,  i.e.,  “all  leave  during

service for which leave salary is payable” would count.  The corollary is

that if an employee is not paid for leave, that period has to be excluded

from the period to be counted for admissibility of pension.  Rule 3(1)(q),

while defining “qualifying service” provides for service rendered while

on duty “or otherwise which shall be taken into account for the purpose

of pensions and gratuities admissible under these rules.”  Thus, the period

of leave for  which salary is  payable  would be taken into account  for

determining the pensionable service,  while the period for  which leave

salary is not payable would be excluded.  The Rule is crystal clear and

does not brook any two interpretations. It is a well settled principle of

interpretation  that  when  the  words  of  a  statute  are  clear  and

unambiguous,  there  cannot  be  a  recourse  to  any  principle  of

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interpretation other than the rule of literal construction.6

21. The endeavour to refer to Rules 27 & 28 of the Pension Rules is of

no avail, as those are dealing with the effect of interruption in service

which may result in forfeiture of past service.  In the present case, there

has been no forfeiture of past service.

22. Insofar as the Government decision dated 28.2.1976 is concerned,

that elucidates the requirement of a prompt entry into the service record,

but this certainly cannot supersede the Rule.  The position would be no

different for SR 200, SR 202 and the other Government of India Order

dated 24.6.1966.  It is trite to say that as per Kelsen’s Hierarchy of Legal

Norms, the  Grundnorm, being the Constitution of India, the applicable

hierarchy would read as under:

“(1) The Constitution of India.

(2) Statutory Law, which may be either Parliamentary Law or law made by the State Legislature.

(3)  Delegated  legislation  which  may  be  in  the  form  of  rules, regulations etc. made under the Act.

(4) Administrative instructions which may be in the form of GOs, Circulars etc.”

6Swedish Match AB v. Securities and Exchange Board, India AIR (2004) SC 4219

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23. In the given facts of the present case, we will have to take note of

an important  aspect,  i.e.,  the respondents  were not  governed by these

Rules, but by the Employees Contributory Provident Fund Scheme.  The

Pension  Scheme was  sought  to  be  introduced only  couple  of  months

before the VRS, and that too was not implemented till 1995.  Not only

that,  it  was  not  implemented  through  the  LIC  but  ultimately  by  the

appellant-Corporation itself, much later in 1995.  Thus, the occasion for

making any entries for this leave period in the service record, in terms of

the Rules did not  even arise at the stage when the VRS was applied.

There may have been some significance to these aspects if the Pension

Rules were already applicable over a period of time and entries had not

been made, though, even there, it would not be in supersession of the

plain language of the Rule.

24. We have, thus, no hesitation in coming to the conclusion that to

avail of the benefit of Pension Rules, an employee must qualify in terms

of the Rules.  In the present case, the respondents unfortunately do not do

so, as the period which is sought to be excluded from their qualifying

service is one where they have admittedly not been paid leave salary.

The qualifying period for the VRS would have to be governed by that

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Scheme  and  cannot  ipso  facto  be  imported  into  the  entitlement  of

pension, contrary to the plain wordings of the Pension Rules.  We see no

conflict in this, apart from the fact that the Pension Rules came into force

actually much later, though the intention was announced just before the

VRS.  The respondents were governed prior to that by the Employees

Contributory Provident Fund Scheme.

25. We may,  however,  notice here that  while the result  may be the

same as in Lillu Ram’s7 case, our reasoning is slightly different from that

view.

26. We,  thus,  allow  the  appeal  and  set  aside  the  impugned  order,

leaving the parties to bear their own costs.

27. However, to avoid any grave hardship, if any payments have been

made to the respondents, especially in view of the interim order dated

23.7.2014, the appellant-Corporation will not claim any refund of such

amount already paid.

..….….…………………….J. [S.A. Bobde]

7 (supra)

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...……………………………J. [Sanjay Kishan Kaul]

...……………………………J. [Deepak Gupta]

New Delhi. February 26, 2019.

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