The Punjab and Haryana High Court at Chandigarh has dismissed a petition filed by the Post Graduate Institute of Medical Education and Research (PGIMER) , Chandigarh, affirming that employees engaged prior to the implementation of the New Pension Scheme (NPS) are entitled to coverage under the Old Pension Scheme (OPS) . The ruling clarifies that the date of an employee’s official regularization does not supersede the date of their initial appointment in determining pensionary entitlements , provided the individual remained in continuous service . The decision, delivered by a Division Bench comprising Justice Harsimran Singh Sethi and Justice Minderjeet Yadav, provides significant relief to long-serving staff whose employment status remained in limbo for decades despite continuous performance of duties.

Decades of Continuous Service Recognized

The matter originated from an Original Application (OA) filed before the Central Administrative Tribunal (CAT) , Chandigarh, by three employees who had served as Mortar Mates. These workers were initially recruited between January and June 1994 , initially for a six-month tenure. However, owing to consistent organizational requirements, their employment extended far beyond the initial contract period. They were granted a regular pay scale and annual increments throughout their tenure, though they were technically designated as work-charged employees paid from a contingency fund.

It was not until August 6, 2016 , that their services were formally regularized by the institute. Following this regularization, the employees sought the benefits of the Old Pension Scheme. When the institute denied this claim, the CAT intervened in 2025, directing the management to grant them the benefits of the older system. Challenging this, PGIMER approached the High Court, asserting that the employees were ineligible because they were hired on a contingency basis and because there was no sanctioned post for a "Mortar Mate" at the time of their 2016 regularization.

The High Court Bench, upon reviewing the records, noted that the facts regarding the duration of employment and the nature of compensation were undisputed. The respondents had served for over 32 years, rendering continuous service that the court deemed essential for determining their retirement benefits.

Overcoming Administrative Objections on Contingency Funding

A primary contention raised by PGIMER was that the employees, having been paid out of the contingency fund, did not meet the criteria for being considered permanent government servants from their date of initial hiring. The petitioner argued that their engagement prior to 2016 was merely a stop-gap arrangement and should be treated as distinct from regular service.

The court rejected this argument, observing that the receipt of a regular pay scale and annual increments for over three decades demonstrated that the employment was not ephemeral. The Bench noted: "Once the appointment continues for a period of three decades, merely that the petitioners were paying the respondents out of the contingency fund, will not defeat the claim of the respondents to be treated under the Old Pension Scheme."

Regarding the argument that no sanctioned posts for Mortar Mates existed at the time of regularization, the court adopted a pragmatic approach. It reasoned that since the institute had indeed regularized the employees in 2016, the vacancy against which they were placed must be treated as a valid, sanctioned post for all intents and purposes. The court observed that accepting the petitioner's argument would inadvertently invalidate the regularization process itself, which was a consequence the institute could not sustain.

Applying Settled Principles to Modern Pension Disputes

The decision relies heavily on established legal precedents, most notably the Division Bench judgment of the Punjab and Haryana High Court in Harbans Lal versus State of Punjab and others , which has attained finality up to the Supreme Court of India . That landmark case established that an employee who enters service before the January 1, 2004 , cut-off date is governed by the Old Pension Scheme, regardless of when their services were formally regularized.

The High Court further reinforced its position by citing the recent Supreme Court of India decision in Punjab School Education Board and another versus Satnam Singh (2026 INSC 965). In that case, the apex court upheld the principle that periods of service rendered on a contract, ad hoc, or daily-wage basis must be computed as qualifying service for pension purposes. The court reiterated: "The respondent-employees were indeed regularized and are entitled to be treated as having entered Government service prior to 01.01.2004 and therefore fall under Tier II of the Defined Contributory Pension Scheme ."

By synthesizing these principles, the High Court determined that the respondents, having entered the service of the petitioner long before the promulgation of the New Pension Scheme, possessed a vested right to be governed by the older regime. The Bench observed that the petitioner-institute was unable to dispute the settled principle of law, and therefore, no legal ground existed to deviate from the Tribunal’s earlier directive.

The High Court concluded that the respondents’ long tenure, characterized by the consistent application of regular pay scales and increments, effectively bridged the gap between their initial engagement and their formal 2016 regularization. The Court found no infirmity in the Tribunal’s order and subsequently dismissed the petition. With this ruling, the respondents are now entitled to the full pensionary benefits under the Old Pension Scheme, effectively ending a decade-long struggle to secure their retirement future within the institution. The order underscores the judiciary’s commitment to protecting the rights of long-serving employees against restrictive administrative interpretations of pension eligibility.