Can a govt employee switch pension scheme after accepting retirement benefits? SC clarifies
A retired government employee cannot seek to the benefits of a pension scheme different from the one under which they were covered throughout their service and received retirement benefits, the Supreme Court said on Thursday.
The ruling came in a case involving a retired professor of the National Institute of Rural Development (NIRD) and his claim for coverage under the General Provident Fund-cum-Pension Scheme (GPF) instead of the Central Pension Fund Scheme (CPF), according to an Upstox report.
The dispute centred on the terms of his regularisation and whether he could seek GPF coverage after being treated as a CPF beneficiary throughout his service. The court ended up rejecting his plea, holding that his acceptance of CPF retiral benefits prevented him from subsequently challenging those terms.
Petitioner’s service history
The petitioner, Chandra, joined the institute as a contractual Research Associate on November 12, 1984 and was covered by the CPF Scheme under an office order issued the following day. His services were regularised with effect from November 7, 1985, the news report stated.
Over the following years, he was appointed as the Assistant Director on March 9, 1992 on a regular basis, as Deputy Director on August 10, 1999 on a contractual basis, and as Professor on May 1, 2007, again on a contractual basis.
His services as a Professor were regularised through an office order dated May 4, 2012. The order stated that the regularisation would take effect from the date of the order itself, and that the petitioner’s services would continue to be governed by the existing CPF Scheme.
The services of Chandra’s colleague, Shyam Sunder Prasad Sharma, were regularised on the same date on identical terms.
How pension dispute began?
Chandra retired from service on January 31, 2017, and received his retiral benefits on February 14, 2017, including both NIRD’s and his own contributions to the CPF. After retirement, he approached the Central Administrative Tribunal (CAT), challenging his continued coverage under the CPF Scheme and arguing that he should have been covered under the GPF Scheme under the NIRD Rules, 2011 and Service Bye-laws.
He retired from service on January 31, 2017, and received his retiral benefits on February 14, 2017, including both NIRD’s and his own contributions to the CPF. After retirement, however, he approached the Central Administrative Tribunal (CAT), challenging his continued coverage under the CPF Scheme and arguing that he should have been covered under the GPF Scheme as per the NIRD Rules, 2011 and the institute’s Service Bye-laws.
The CAT, in its July 15, 2019 judgment, ruled in Chandra’s favour and directed NIRD to allow him to join the GPF Scheme from the date he became eligible. The tribunal relied on a previous case involving the petitioner’s colleague Sharma, whose services had also been regularised on May 4, 2012.
However, the Supreme Court had already reversed the Sharma decision. On February 28, 2023, in NIRD versus Shyam Sunder Prasad Sharma and Others, the court held that the regularisation of Sharma’s services pursuant to the order dated May 4, 2012 would operate from the date of that order and would not relate back to the date of his initial appointment.
The apex court found that it was “specifically stated in the order of regularisation dated 04.05.2012 that it would take effect from the date of issuance of the order, which condition had not been challenged by Mr. S.S.P. Sharma”.
When NIRD challenged the CAT’s order in the petitioner’s case before the High Court, the High Court took note of the Supreme Court’s judgment in the Sharma case and concluded that the petitioner’s case was similar.
The High Court found that “the effect of regularisation would, therefore, be from 04.05.2012 and not from the date of his initial appointment” and that “the petitioner had approached the CAT only after his retirement that too after receiving benefits under the CPF Scheme”.
Supreme Court’s judgement
Before the Supreme Court, the petitioner’s counsel attempted to distinguish his case from that of the Sharma case. However, the court wasn’t convinced.
“We are of the considered view that the adjudication undertaken in S.S.P. Sharma (supra) by this Court would also apply to the case of petitioner,” the bench, comprising Justices Ujjal Bhuyan and Atul S. Chandurkar, said.
The judgment implies that employees who accept regularisation on specified terms and receive benefits under a particular pension scheme cannot challenge those terms only after retirement.
The apex court found “no reason, whatsoever, to exercise jurisdiction under Article 136 of the Constitution of India” and dismissed the special leave petition.
