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IN THE HIGH COURT OF JUDICATURE AT MADRAS
S.M.Subramaniam, C.Kumarappan, JJ.
The Director, Local Fund Audit - Appellant
Versus
A.Chandrasekaran and ors. – Respondents
W.A.No.2653 of 2021 and C.M.P.No.17263 of 2021
Decided On : 03-07-2024
Pension - Service Qualification - Tamil Nadu Pension Rules, 1978 - The court interpreted Rule 11(2) of the Tamil Nadu Pension Rules, 1978, determining that only State Government employees can count half of their service for pension eligibility, which did not apply to the employee from a Public Sector Undertaking.
Fact of the Case:
The case involves a former employee of Tamil Nadu Steels Limited who sought pension benefits under the Tamil Nadu Pension Rules after serving in Kanchipuram Municipality but did not meet the minimum qualifying service requirement.
Finding of the Court:
The court found that the employee's service in a Public Sector Undertaking could not be counted towards pension eligibility under the Tamil Nadu Pension Rules, as he was not a State Government employee.
Issues: Whether half of the service rendered by employees in a Public Sector Undertaking can be counted as qualifying service for pension under the Tamil Nadu Pension Rules, 1978.
Ratio Decidendi: The court held that Rule 11(2) of the Tamil Nadu Pension Rules applies only to State Government employees, and since the employee was from a Public Sector Undertaking, he was not eligible for the pension benefits claimed.
Result: The writ order was set aside, and the Writ Appeal was allowed.
JUDGMENT :
S.M.SUBRAMANIAM, J.
Prayer : Writ Appeal filed under Clause 15 of Letters Patent to set aside the order dated 09.07.2020 passed in W.P.No.18921 of 2013 and allow the writ appeal.
The issue primarily raised in the present writ appeal is, whether half of the service rendered by the employees in the Public Sector Undertaking Company is to be reckoned as qualifying service for grant of pension under the Tamil Nadu Pension Rules, 1978.
2. The facts in nutshell would reveal that the 1st respondent was initially served in Tamil Nadu Steels Limited, a company registered under the Companies Act and owned by the Government of Tamil Nadu.
3. It is not in dispute that the Labour Laws are applied for the employees served in Tamil Nadu Steels Limited. Accordingly, admissible Employment Provident Fund (EPF), Gratuity amount are settled based on the Statutes and Rules applicable to company. The company was closed. Closure compensation had been settled in favour of the employees. Thereafter, the 1st respondent was appointed in Kanchipuram Municipality as Junior Assistant and retired from service.
4. It is not disputed that the 1st respondent served 9 years, 5 months and 5 days in Kanchipuram Municipality. Since he had not completed the minimum qualifying service of 10 years under the Pension Rules, pension has not been paid to the 1st respondent. The 1st respondent made a representation to the authorities. The appellant addressed a letter to Commissioner, Kanchipuram Municipality in proceedings dated 01.04.2013, asking the Commissioner to secure consent from the 1st respondent for depositing all the benefits granted by Tamil Nadu Steels Limited including the closure compensation. The 1st respondent agreed to re-pay the gratuity, but declined to re-pay the closure compensation. Therefore, the authorities have not proceeded with the representation submitted by the 1st respondent for grant of pension. The 1st respondent filed a writ petition, which was allowed. Thus, the Director, Local fund Audit, Chennai preferred the present writ appeal.
5. Rule 11 Sub Clause (2) was inserted by way of amendment in G.O.Ms.No.283, Finance (Pension) Department dated 15th April, 1996 with effect from 1st June, 1979. The said Rule reads as under;
“[(2) Half of the service paid from contingencies shall be allowed to count towards qualifying service for pension along with regular service subject to the following conditions:
(1) Service paid from contingencies shall be in a job involving whole time employment and not part-time for a portion of the day.
(2) Service paid from contingencies shall be in a type of work or job for which regular posts could have been sanctioned, for example Chowkidar.
(3) Service shall be for which the payment is made out on monthly or daily rates computed and paid on a monthly basis and which, though not analogous to the regular scale of pay, shall bear some relation in the matter of pay to those being paid for similar jobs being performed by staff in regular establishments.
(4) Service paid from contingencies shall be continuous and followed by absorption in regular employment without a break.
(5) Subject to the above conditions being fulfilled, the weightage for past service paid from contingencies shall be limited to the period after the 1st January, 1961 for which authentic records of service may be available.
(6) Pension or revised pension admissible as the case shall be paid from the 23rd June, 1988]”
6. As per the above Rule, half of the services rendered by the State Government employee under non-pensionable establishment salary allowed to be counted for the pensionary benefits. However, in the present case, the 1st respondent was not a State Government employee. He was an employee in Tamil Nadu Steels Limited, which is a Public Sector Undertaking. Therefore, the service conditions are governed under applicable Labour Laws. Since the 1st respondent was not a State Government employee served under non-pensionable establishment, questio
AI
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