VALSAN P. versus THE STATE OF KERALA AND ORS. on 21 October 2021

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SUPREME COURT REPORTS

[2021] 10 S.C.R.

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VALSAN P.

v.

THE STATE OF KERALA AND ORS.

(Civil Appeal No. 6292 of 2021)

BOCTOBER 21, 2021

[M. R. SHAH AND A. S. BOPANNA, JJ.]

Service Law: Pension – Appellant worked in TelecomDepartment during the period 05.02.1974 to 31.05.1984 – On04.06.1984, he joined Public Sector Undertaking owned by StateCGovernment and worked there till 31.05.1987 – On 31.05.1987,through Public Service Commission, he joined the TechnicalEducation Department and served there for 19 years and onreaching superannuation, retired on 30.06.2006 – Appellant madeclaim for pension, by reckoning the service rendered during theDperiod 05.02.1974 to 31.05.1984 in the Telecom Department whichwas service under Central Government – Held: Government Orderdated 24.09.2014 made with reference to Rule 29(a) Part III KeralaService Rules indicated that the benefit sought for by the appellantis provided and the sandwiched non qualifying service as break inthe two services is condonable and the prior public service shall beEreckoned as qualifying service for pension – The said GovernmentOrder has taken note of the several requests received to reckon theprior qualifying service – Further, the main aspect of reckoning theservice rendered in Central Government for pensionary benefit afterjoining State Government service was given effect through theFGovernment Order dated 12.11.2002 and 06.12.2003 i.e., whenthe appellant was still in State Government service and had notretired – The issue of condoning the break i.e., the sandwich periodwas claimed immediately on retirement and it was still being agitated– Appellant entitled to relief claimed.

GAllowing the appeal, the Court

Held: 1. The appellant had worked in the TelecomDepartment from 05.02.1974 to 31.05.1984 which is pensionableservice in usual course if the other requirements were satisfied.The appellant had thereafter worked in the Technical EducationHDepartment under the State Government from 31.05.1987, till his retirement on attaining the age of superannuation on30.06.2006. The said service is also pensionable service. Duringthe interregnum, between 04.06.1984 to 30.05.1987 the appellantworked in ‘SILK’ which is a State Government Public SectorUndertaking and the service rendered therein is admittedly notpensionable service. The said period of service therefore acts asa disconnect between the two different pensionable servicerendered by the appellant and the same needs to be condoned toprovide a single block of pensionable service. [Para 7][77-A-C]

2. The case of the appellant is not that the non-pensionableservice rendered in the State PSU is also to be reckoned and theentire service from 05.02.1974 to 30.06.2006 is to be admittedfor computing the pensionary benefits as assumed by the HighCourt. What the appellant seeks is to exclude the servicerendered in State PSU and condone that period between04.06.1984 to 31.05.1987 from being treated as a disjoint or breakbetween the two pensionable services, though, one is under theCentral Government and the other under the State Government.The sum and substance of the claim put forth by the appellant isto reckon the service between 05.02.1974 to 31.05.1984, plus,the service between 31.05.1987 to 30.06.2006 as the total numberof years as the pensionable service, clearly excluding the numberof years between 04.06.1984 to 30.05.1987. [Para 8][77-D-F]

3. Rule 29, Part III Kerala Service Rules, if taken intoconsideration as a standalone provision, it would settle the issueagainst the appellant since the break between the twoappointments is much more than the joining period and the breakitself is due to non-pensionable employment. However, what isrequired to be examined is the availability of provision to condonesuch break. Appellant has therefore referred to Rule 39 of PartII KS and SSR to indicate the power available to the StateGovernment to take just and equitable decisions relating to theservice of any person and the Rule should be dealt in the mannerin which it is favourable to the person in service. [Para 10][78-B-D]

4. In terms of Government Order dated 12.11.2002, thoughthe benefit of reckoning the earlier pensionable service betweenCentral Government and State Government was provided, it was AB

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Asubject to remitting the proportionate prorata pensionary liabilityon service share basis between the two employers. However, bya subsequent Government Order dated 06.12.2003, which hasreference to the earlier Government Order dated 12.11.2002,the State Government has done away with the proportionateprorata sharing between the two employers for payment ofBpensionary benefits. The State Government has notified to bearthe pensionary benefits. In view of the said position, theobservation of the High Court that the appellant is free to movethe Central Government if he has a case that his service in theTelecom Department is liable to be reckoned is not justified. IfCthe break in service is condoned as sought by the appellant, thenthe entire relief would be available at the hands of the StateGovernment. [Paras 11, 12, 13][79-C-D, G-H]

5. Government Order dated 24.09.2014 was made withreference to Rule 29(a) Part III KSR. A perusal of theDGovernment Order dated 24.09.2014 indicates that the benefitsought for by the appellant is provided and the sandwiched nonqualifying service as break in the two services is condonable andthe prior public service shall be reckoned as qualifying servicefor pension. The KAT had taken note of the entire sequence andhad rightly noted that the issue had not been settled and notEreached finality in the case of the appellant since his reviewpetition dated 17.09.2014 against the order dated 25.07.2014 wasstill pending when the Government Order dated 24.09.2014 wasissued. The said Government Order has taken note of the severalrequests received to reckon the prior qualifying service. Further,Fthe main aspect of reckoning the service rendered in CentralGovernment for pensionary benefit after joining State Governmentservice was given effect through the Government Order dated12.11.2002 and 06.12.2003 i.e., when the appellant was still inState Government service and had not retired. The issue of condoning the break was claimed immediately on retirement andGit was still being agitated. The review was rejected on 21.05.2015only after the Government Order dated 24.09.2014 was issuedgranting the benefit of condoning the break. The KAT was justifiedin its conclusion and High Court has erred in setting aside thesame. [Paras 14 and 15][80-B, F, G-H; 81-A-C]H

CIVIL APPELLATE JURISDICTION: Civil Appeal No.6292 of

2021.

From the Judgment and Order dated 21.05.2019 of the High Courtof Kerala at Ernakulam in OP (KAT) No.468 of 2017.

P. V. Surendranath, Sr. Adv., Subhash Chandran KR, Biju P.Raman, Ms. Lekha Sudhakaran, Ms. Resmitha R. Chandran, Advs. forthe Appellant.

C. K. Sasi, Abdullah Naseeh, Ms. Meena K. P., Advs. for theRespondents.

The Judgment of the Court was delivered by

A. S. BOPANNA, J.

1. The appellant is before this Court in this appeal, assailing theorder dated 21.05.2019 passed by the learned Division Bench of theHigh Court of Kerala at Ernakulam in OP (KAT) No.468 of 2017 titled,The State of Kerala and Others. Vs. Valsan P. By the said order thelearned Division Bench has allowed the OP and set aside the orderdated 14.11.2016 passed by the Kerala Administrative Tribunal,Thiruvananthapuram (for short ‘KAT’) in O.A. No.975 of 2015. TheKAT had through the said order allowed the application granting thebenefit of pension by condoning the period of break in service, as beingpermissible in the circumstance.

2. The undisputed facts are that the appellant worked as aTechnician in the Telecom Department during the period 05.02.1974 to31.05.1984. The appellant thereafter joined as an Engineer in SteelIndustries Limited, Kerala (for short ‘SILK’) on 04.06.1984. The saidSILK is a Public Sector Undertaking (for short ‘PSU’) owned byGovernment of Kerala. He worked there till 31.05.1987. Subsequentthereto, through the Public Service Commission, the appellant joined theTechnical Education Department on 31.05.1987. He served for about19 years and on attaining the age of superannuation, retired from serviceon 30.06.2006.

3. The contested issue arose at this point when the appellant madeclaim for the pensionary benefits by taking into consideration and reckoningthe service of 10 years rendered by the appellant between 05.02.1974 to31.05.1984 in the Telecom Department which was service under theCentral Government. The Accountant General, by the communicationdated 26.07.2006 however informed that since the break between theCentral Service and State Service is nearly three years, unless the same A

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Ais condoned by the State Government, the Central Service cannot bereckoned as qualifying service for pension. The appellant therefore madea representation dated 23.09.2006 to the Government requesting tocondone the said break in service. Though the said request was rejectedby the communication dated 12.02.2007, it was by an unreasoned order.On being assailed, the same was set aside and the matter was sent backBfor reconsideration. On such reconsideration, the request made by theappellant was declined stating that there are no rules for condoning thebreak in service. It stated that as per rules the break between the twoappointments shall not exceed the joining time admissible under servicerules. The rule referred to was Rule 29 (b) Part III of Kerala ServiceCRules (for short ‘KSR’).

4. The appellant however filed a review petition dated 17.09.2014seeking the State Government to review the decision since ‘SILK’, towhich the appellant had joined in the sandwiched period was a fullyState-owned PSU. Hence, the appellant requested the exercise of powerDunder Rule 39 of Part II of Kerala State and Subordinate Service Rules(for short ‘KS&SSR’). The review petition filed by the appellant wasrejected through the intimation dated 21.05.2015 despite the Governmentorder dated 24.09.2014. The appellant who was aggrieved by the rejectionof his request approached the KAT in O.A. No.975 of 2015.

E5. The KAT on making a detailed analysis of not just the rules butalso the series of Government orders which are relevant, held the appellantentitled to the benefit and accordingly allowed the application. The KATnoted that the requirement was that the period of service in ‘SILK’ is tobe condoned as a disconnect period to provide continuity of service inthe two employments. Thus, giving the benefit of the Government orderFdated 24.09.2014 the entitlement as claimed was upheld. The High Courton the other hand has declined the relief by proceeding on the basis as ifthe appellant was seeking to reckon the service rendered by him in ‘SILK’also as pensionable service. Insofar as service rendered in the TelecomDepartment it was held that the appellant should approach the CentralGGovernment seeking to reckon the same. The High Court, thereforewithout addressing the real issue has set aside the order passed by theKAT. The appellant thus claiming to be aggrieved has filed this appeal.

6. We have heard Mr. P.V. Surendranath, learned senior counselfor the appellant, Mr. C.K. Sasi, learned counsel for the respondentsand perused the appeal papers.H

7. To put the matter in perspective, it is to be noted at the outsetthat the appellant had worked in the Telecom Department from05.02.1974 to 31.05.1984 which is pensionable service in usual course ifthe other requirements were satisfied. The appellant had thereafterworked in the Technical Education Department under the StateGovernment from 31.05.1987, till his retirement on attaining the age ofsuperannuation on 30.06.2006. The said service is also pensionableservice. During the interregnum, between 04.06.1984 to 30.05.1987 theappellant worked in ‘SILK’ which is a State Government Public SectorUndertaking and the service rendered therein is admittedly notpensionable service. The said period of service therefore acts as adisconnect between the two different pensionable service rendered bythe appellant and the same needs to be condoned to provide a singleblock of pensionable service.

8. In that background, it is also to be kept in perspective that thecase of the appellant is not that the non-pensionable service rendered in‘SILK’ is also to be reckoned and the entire service from 05.02.1974 to30.06.2006 is to be admitted for computing the pensionary benefits asassumed by the High Court. On the other hand, what the appellant seeksis to exclude the service rendered in ‘SILK’ and condone that periodbetween 04.06.1984 to 31.05.1987 from being treated as a disjoint orbreak between the two pensionable services, though, one is under theCentral Government and the other under the State Government. Thesum and substance of the claim put forth by the appellant is to reckonthe service between 05.02.1974 to 31.05.1984, plus, the service between31.05.1987 to 30.06.2006 as the total number of years as the pensionableservice, clearly excluding the number of years between 04.06.1984 to30.05.1987.

9. With reference to the consideration made by the StateGovernment in rejecting the claim of the appellant, the learned counselfor the respondents has referred to Rule 29, Part III KSR to contendthat the Rule is categorical that the benefit of past service will standforfeited if the break between the two appointments exceeds the joiningtime admissible under the service Rules. The said Rule reads as hereunder:

“Rule 29 Part III KSR

29. Resignation andDismissal. - (a) Resignation of the PublicService or dismissal or removal from it, entails forfeiture of pastservice.

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A(b) Resignation of an appointment to take up another appointmentthe service in which counts is not resignation from public service.

Note: - The break between the two appointments should notexceed the joining time admissible under the service rules plus thepublic holidays”.

B10. The above noted Rule if taken into consideration as a standaloneprovision, it would settle the issue against the appellant since the breakbetween the two appointments is much more than the joining period andthe break itself is due to non-pensionable employment. However, whatis required to be examined is the availability of provision to condoneCsuch break. The learned counsel for the appellant has therefore referredto Rule 39 of Part II KS and SSR to indicate the power available to theState Government to take just and equitable decisions relating to theservice of any person and the Rule should be dealt in the manner inwhich it is favourable to the person in service. The said Rule reads ashereunder:D“Rule 39 of Part II KS & SSR

39. Notwithstanding, anything contained in these rules or in theSpecial Rules or in any other Rules or Government Orders theGovernment shall have power to deal with the case of any personor persons serving in a civil capacity under the Government ofEKerala or any candidate for appointment to a service in suchmanner as may appear to the Government to be just and equitable:

Provided that where such rules or orders are applicable tothe case of any person or persons, the case shall not be dealt within any manner less favourable to him or them than that providedFby those rules or orders.

This amendment shall be deemed to have come into forcewith effect from 17[th]December 1958.”

11. In that backdrop, having noted that the appellant’s first spell ofpensionable service was under the Central Government and the secondGspell was under the State Government, it would be apposite to take noteof the Government Order dated 12.11.2002 referred by the learnedcounsel for appellant. The relevant portion of the Government Orderdated 12.11.2002 reads as hereunder:

“Government have examined the matter in detail and are pleasedHto order that the employees of the State Government Departments who left the former service in Central Government/ Central PublicSector Undertakings on their own volition for taking upappointment is State government Departments will be allowed toreckon their prior service for all pensionary benefits along withthe service in the State Government Department if the formeremployer remits the share of proportionate prorate pensionaryliability on a service - share basis.

These Orders will take effect, including monetary effect, onlyfrom the date of this order and individual cases otherwise settledwill not be re-opened.”

12. Though the benefit of reckoning the earlier pensionable servicebetween Central Government and State Government was provided, itwas subject to remitting the proportionate prorata pensionary liability onservice share basis between the two employers. However, by asubsequent Government Order dated 06.12.2003, which has referenceto the earlier Government Order dated 12.11.2002, the State Governmenthas done away with the proportionate prorata sharing between the twoemployers for payment of pensionary benefits. The State Governmenthas notified to bear the pensionary benefits. The relevant portion of thesaid Government Order dated 06.12.2003 reads as hereunder:

“Government have examined the matter in detail and in modificationof the orders issued in the G.O. 3rd cited are pleased to order thatin the case of prior service rendered by Central Governmentemployees in State Government and vice versa, the liability ofPension including gratuity, will be become in full by the centralGovernment/State Government to which the Governmentservantpermanently belongs at the time of retirement and no recovery ofproportionate pension will be mode from Central Government/State Government under whom he had served. But in the case ofemployees who left the former service in the Central Public SectorUndertakings the orders issued in G.O. dt 12.11.02 will stand.”

13. In view of the said position, the observation of the High Courtthat the appellant is free to move the Central Government if he has acase that his service in the Telecom Department is liable to be reckonedis not justified. If the break in service is condoned as sought by theappellant, then the entire relief would be available at the hands of theState Government. Therefore, the solitary moot question for considerationin the instant case is, as to whether the break in service interrupting the AB

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Aservice rendered in Telecom Department and the Technical EducationDepartment is condonable.

14. On this aspect, the learned counsel for the appellant has reliedon the Government Order dated 24.09.2014 whereunder the condonationof the non-qualifying sandwiched period was provided for, to reckon theBqualifying service. The Government Order was made with reference toRule 29 (a) Part III KSR. The Government Order dated 24.09.2014reads as hereunder:

“As per Rule 29(a) Part III Kerala Service Rules, resignation ofthe Public Service or dismissal or removal from it, entails forfeitureCof past service. As per Rule 29(b) of ibid, resignation of anappointment to take up another appointment the service in whichcounts is not resignation from public service and the break betweentwo appointments should not exceed the joining time admissibleunder the service rules plus public holidays.

D2) Several requests have been received in Government toreckon the prior qualifying service for pension after condoningthe non-qualifying sandwiched service as break withoutforfeiture of past service.

3) Government have examined the matter in detail and areEpleased to order that the prior public service shall be reckonedas qualifying service for pension after condoning thesandwiched non qualifying service as break between the twoservices.”

A perusal of the Government Order noted above indicates thatFthe benefit sought for by the appellant is provided and the sandwichednon qualifying service as break in the two services is condonable andthe prior public service shall be reckoned as qualifying service for pension.The learned counsel for the respondents contended that the High Courtwas justified in holding that the appellant had retired on 30.06.2006, whilethe Government Order is dated 24.09.2014 and as such cannot be madeGapplicable retrospectively. We are unable to accede to such contention.In fact, the KAT had taken note of the entire sequence and had rightlynoted that the issue had not been settled and not reached finality in thecase of the appellant since his review petition dated 17.09.2014 againstthe order dated 25.07.2014 was still pending when the Government Orderdated 24.09.2014 was issued. The said Government Order in para 2 hasH

taken note of the several requests received to reckon the prior qualifyingservice. Further, the main aspect of reckoning the service rendered inCentral Government for pensionary benefit after joining StateGovernment service was given effect through the Government Orderdated 12.11.2002 and 06.12.2003 i.e., when the appellant was still inState Government service and had not retired. The issue of condoningthe break i.e., the sandwich period was claimed immediately on retirementand it was still being agitated. The review was rejected on 21.05.2015only after the Government Order dated 24.09.2014 was issued grantingthe benefit of condoning the break.

15. In that view, we are of the considered opinion that the KATwas justified in its conclusion and High Court has erred in setting asidethe same. The order dated 21.05.2019 passed by the High Court ofKerala in O.P. (KAT) No.468 of 2017 is therefore set aside. The orderdated 14.11.2016 passed by the KAT in O.A. No. 975 of 2015 is restoredfor its implementation. The time line depicted in the said order forimplementation shall apply from this day.

16. The appeal is accordingly allowed with no order as to costs.

17. The pending applications, if any, shall also stand disposed of.

Devika Gujral

Appeal allowed.

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