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Work-Charged Service Counts for Pension Eligibility, Not Quantum, Rules Allahabad High Court

Allahabad: In a significant ruling clarifying the calculation of pension benefits for employees previously engaged in work-charged establishments, the Allahabad High Court has held that such service period can be counted towards fulfilling the minimum qualifying service required for pension eligibility, but not for determining the quantum of the pension itself.

A Division Bench of the High Court, in a recent judgment, set aside an earlier order passed by a Single Judge, emphasizing that the legal position established by the Supreme Court, particularly in the case of Udai Pratap Thakur , distinguishes between counting work-charged service for pension eligibility versus counting it for the full duration to calculate the pension amount.

Case Background

The case involved a petitioner, Arun Kumar Srivastava, who was initially engaged as a daily wager in the Provincial Division, Public Works Department (PWD), Varanasi in 1984. His status changed to work-charged establishment in 1992 and he was eventually regularized in 2003. After retiring in 2019, he sought revised pension benefits, including the counting of his service period in the work-charged establishment (from 1992 to 2003) towards his regular service for pension calculation. His representation was rejected by the authorities in 2021, prompting him to file a writ petition.

The Single Judge had allowed the writ petition on May 16, 2023, relying on the Supreme Court's judgment in Prem Singh vs. State of Uttar Pradesh and others . The Single Judge directed the authorities to count the petitioner's service rendered as a daily wager for pension purposes.

State's Appeal and Arguments

Aggrieved by the Single Judge's order, the State respondents filed a Special Appeal. The State argued that the Single Judge had erred in treating the petitioner's claim as counting 'daily wager' service when the plea was specifically for 'work-charged' service from 1992-2003.

The State contended that work-charged employees are fundamentally different from regular employees as they are not appointed on substantive posts through due process. Citing provisions of the Civil Service Regulations (CSR) and the Financial Hand Book, the State argued that part-time or work-charged services do not qualify for pension unless the employee holds a substantive post on a permanent establishment.

Crucially, the State submitted that the Prem Singh judgment relied upon by the Single Judge was based on the CSR as it existed then, and that the law had since been superseded by the U.P. Qualifying Service for Pension and Validation Act, 2021 . This Act defines 'qualifying service' as service rendered on a temporary or permanent post in accordance with service rules, thereby excluding work-charged service from being counted for pensionary benefits. The State also referenced previous judgments, including State of U.P. vs. Dukh Haran Singh (upheld by SC), which held that service prior to regularization does not qualify for pension under Regulations 361 and 370.

Significantly, the State argued that the Single Judge failed to consider the latest Supreme Court judgment in Udai Pratap Thakur , which, according to the State, clarified and restricted the application of the Prem Singh ruling.

Petitioner's Stance

The counsel for the petitioner opposed the appeal, maintaining that services rendered in the work-charged establishment were indeed liable to be counted for pensionary benefits, and that the Single Judge had rightly relied on the Prem Singh judgment.

Court's Analysis and Ruling

The Division Bench carefully examined the records, the Single Judge's order, and the arguments presented. It noted the discrepancy between the petitioner's plea (counting work-charged service) and the Single Judge's direction (counting daily wager service).

The Bench delved into the Supreme Court's judgment in Prem Singh , acknowledging its finding that employees who rendered long service on ad hoc/work-charged basis should not be denied pension benefits. The Prem Singh judgment had read down Rule 3(8) of the 1961 Rules and struck down Regulation 370 of the CSR to hold that services rendered prior to regularization in work-charged/contingency/non-pensionable establishments shall be counted towards qualifying service .

However, the Division Bench found that the Single Judge had overlooked the subsequent and clarifying judgment of the Supreme Court in Udai Pratap Thakur . The Bench cited the Udai Pratap Thakur judgment extensively, highlighting its clarification that while Prem Singh allowed work-charged service to be counted for qualifying service (to meet minimum eligibility), it did not hold that the entire service rendered as work-charged should be counted for the quantum of pension. The Supreme Court in Udai Pratap Thakur reasoned that counting the entire period for the quantum of pension would effectively amount to regularizing the service from the initial date of work-charged engagement, which is distinct from appointment on a substantive post through due process.

The Division Bench also noted that the Single Judge had not considered the U.P. Qualifying Service for Pension and Validation Act, 2021 , which retrospectively amended the definition of 'qualifying service' under the 1961 Rules.

Based on the clarification provided in Udai Pratap Thakur and the provisions of the 2021 Act, the High Court concluded that the petitioner's services rendered as a daily wager or work-charged employee cannot be counted for the purpose or quantum of pension. While such service can be counted for qualifying service to ensure eligibility, the court noted that the petitioner was already receiving pension, implying this aspect had likely been addressed.

Consequently, the Division Bench held that the Single Judge's order, which relied on Prem Singh without considering the subsequent clarification in Udai Pratap Thakur and the 2021 Act, was unsustainable.

The Special Appeal was allowed, and the judgment and order dated May 16, 2023, passed by the Single Judge were set aside.