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2026 Supreme(SC) 610

SUPREME COURT OF INDIA
DIPANKAR DATTA, SATISH CHANDRA SHARMA, JJ.
Bency John – Appellant
Versus
Kerala State Electricity Board Ltd & Ors. – Respondents
Civil Appeal Nos. 8170-8173 of 2026 [Arising Out of SLP (C) Nos.1377-1380 of 2021]
Decided On : 26-05-2026

Advocates appeared:
For the Appellant(s) : Mr. Renjith B. Marar, Adv. Ms. Lakshmi N. Kaimal, AOR Mr. Arun Poomulli, Adv. Mr. Harsh Vardhan Shyam, Adv. Ms. Jeby Mather, Adv.
For the Respondent(s): Mr. Subhash Chandran K.R, AOR Mr. Anirudh K P, Adv. Mr. Bineesh K, Adv. M/s Krs Associates, Adv.

Employees of a national transport entity are civil servants of the Union holding posts in connection with the affairs of the Union. Specific service rules do not negate this status, and benefits previously granted based on past government service cannot be arbitrarily revoked by an employer.

Headnote:(A) Constitution of India - Articles 309 and 311 - Status of employees in the national transport entity - Employees of the national transport system are civil servants of the Union, as they hold civil posts in connection with the affairs of the Union. The existence of separate service, conduct, or discipline rules specific to this department does not alter the fundamental status of these employees as servants of the central government. (Paras 38, 40, 42)

(B) Service Law - Pay fixation and weightage - Past service rendered under the central government, including the national transport entity, must be reckoned for the purpose of computing weightage in pay fixation, provided such service was regular and pensionable. An administrative body is bound by its own settlements and cannot arbitrarily divest an employee of benefits already granted and acted upon. (Paras 8, 9, 46)

Facts of the case:
An employee transitioned from a national transport utility to a public entity. Based on existing administrative policy and long-term settlements, the prior government service was recognized, and the employee was granted weightage in pay fixation. Subsequently, the public entity unilaterally withdrew this benefit, contending that the prior service did not qualify as central government service due to its being governed by separate statutory rules. The employee challenged this recovery action.

Findings of Court:
The court determined that the delegation of administrative functions to a specialised board does not diminish the status of railway service as service under the Union. The constitutional safeguards and rules governing public services apply across departments even when separate frameworks exist for administrative convenience.

Issues: 1. Whether service under a national transport entity constitutes employment in connection with the affairs of the Union notwithstanding specific internal service rules. 2. Whether an employer is permitted to unilaterally rescind benefits previously extended to an employee based on valid personnel policies after the employee has relied upon those policies.

Ratio Decidendi: The status of a person as a civil servant is determined by the underlying constitutional relationship of master and servant, irrespective of the existence of specific service rules. The delegation of operational authority does not change the identity of the employer, and therefore, prior central government service remains central government service for all benefit calculations. The court affirmed that benefits cannot be withdrawn arbitrarily once they have been formally granted and accepted.

Result: Appeals allowed.

Table of Content
1. procedural history and scope of the appeals. (Para 1 , 2 , 3 , 4)
2. factual background involving pay fixation and service history. (Para 5 , 6 , 7 , 8 , 9 , 10 , 11 , 12 , 13 , 14)
3. appellant's claim that railway service is central government service. (Para 15 , 16)
4. respondent's contention regarding separate statutory and service rules. (Para 17 , 18)
5. history and administrative setup of the railway board. (Para 19 , 20 , 21 , 22)
6. constitutional safeguards and the legal status of railway servants. (Para 23 , 24 , 25 , 26 , 27 , 28 , 29 , 30 , 31 , 32 , 33 , 34 , 35 , 36 , 37 , 38)
7. defining civil post and service under the union of india. (Para 39 , 40 , 41 , 42)
8. ratio: railway servants are central government employees regardless of specific conduct rules. (Para 43 , 44 , 45 , 46 , 47)
9. conclusion and directions for granting benefits. (Para 48 , 49 , 50 , 51)

JUDGMENT :

DIPANKAR DATTA, J.

THE APPEALS

1. These appeals by the appellant - Bency John - by special leave, are unusually directed against multiple orders of a Division Bench of the High Court of Kerala at Ernakulam.

2. W.A. No.1155 of 2017 (Kerala State Electricity Board Limited & ors. v. D. Vishnu Nampoothiri) was allowed by the Division Bench vide a short order dated 19th August, 2019 spread over 3 (three) pages containing only 5 (five) paragraphs. The judgment and order dated 8th February, 2017 of the Single Judge in W.P. (C) No.13862 of 2014 was set aside. On the same day, i.e., 19th August, 2019, the Division Bench dismissed W.A. No.1895 of 2017 (Kerala State Electricity Board Limited & ors. v. Bency John) by a short two paragraph order, referring to its earlier order in W.A. No.1155 of 2017. As a result, the judgment and order dated 21st March, 2017 passed by the Single Judge allowing the appellant’s writ petition [W.P. (C) No.18225 of 2013] stood set aside. Appellant applied for a review (R.P. No.1095 of 2019) of the order dated 19th August, 2019 whereby the appeal of the Kerala State Electricity Board Limited1[Board] was allowed. Though not a party to W.A. No.1155 of 2017, the appellant also applied for a review (R.P. No.280 of 2020) of the order dated 19th August, 2019 whereby such appeal stood allowed. By its order dated 6th March, 2020, the Division Bench dismissed both the review petitions.

3. Thus, these 4 (four) appeals challenge the orders of the Division Bench allowing W.A. No.1155 of 2017 and W.A. No.1895 of 2017 of the Board and dismissing R.P. No.1095 of 2019 and R.P. No.280 of 2020 of the appellant.

4. Dismissal of review petitions do not accord a ground to carry the same in an appeal. Thus, we shall confine our examination to the validity of the orders of the Division Bench dated 19th August, 2019, allowing the writ appeals of the Board referred to above.

BRIEF FACTS

5. The basic facts, lying in a narrow compass, are not in dispute.

6. Appellant joined the Indian Railways2[Railways] as a Junior Draftsman on 9th August, 1990. After rendering more than 10 (ten) years of regular pensionable service with the Central Government, he was relieved on 24th February, 2001 to join the Board. He joined as a Sub-Engineer on 26th February, 2001.

7. Upon his joining the Board, the Railways remitted a sum of Rs.2,16,429/- towards pro-rata pension liability against a demand of Rs.1,50,597/- made by the Board. This was duly recorded in the appellant’s ‘Service Book’, acknowledging that the service rendered in the Railways is liable to be reckoned for pension.

8. The Board itself, through its order bearing B.O. 2119/96 dated 9th January, 19963[Annexure P-5], had explicitly provided that "regular pensionable Central Government Service followed by Board Service" would be counted for the purpose of "computing qualifying service for weightage".

9. Further, Long Term Settlements entered into between the Board and its employee unions in 20004[Annexure P-6] and 20075[Annexure P-10] consistently provided that "former Government service followed by Board servi

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