DELHI TRANSPORT CORPORATION versus BALWAN SINGH & ORS. on 26 February 2019

SUPREME COURT REPORTS

[2019] 4 S.C.R.

A

DELHI TRANSPORT CORPORATION

v.

BALWAN SINGH & ORS.

(Civil Appeal No. 7159 of 2014)

B

FEBRUARY 26, 2019

[S. A. BOBDE, SANJAY KISHAN KAUL ANDDEEPAK GUPTA, JJ.]

Central Civil Services Pension Rules, 1972 – rr.3(1)(q), 21,27, 28, 49(1) – Respondents, ex-employees of the appellant-CCorporation, governed by the Employees Contributory ProvidentFund Scheme – Introduction of pension scheme as per Office Orderdtd. 27.11.1992 – Announcement of Voluntary Retirement Scheme(VRS) in 1993 – In order to avail this Scheme, the eligibility conditionsrequired an employee to have completed 10 years of service in theDappellant, or completed 40 years of age – Sub-clause (g) of Clause4 of the Scheme provided for pensionary benefits as per OfficeOrder dtd. 27.11.1992 – Respondents availed VRS – Held disentitledto pension on account of exclusion of period when they remainedabsent without authorisation, for which period they were held notentitled to salary – In Lillu Ram’s case such exclusion was upheldE– Reconsideration by larger Bench – Held: VRS itself, morespecifically Clause(g), makes Pension Rules applicable– r.21 is clear,i.e.”all leave during service for which leave salary is payable” wouldcount – If an employee is not paid for leave, that period has to beexcluded from the period to be counted for admissibility of pensionF– r.3(1)(q), while defining “qualifying service” provides for servicerendered while on duty “or otherwise which shall be taken intoaccount for the purpose of pensions and gratuities admissible underthese rules”– Thus, the period of leave for which leave salary isnot payable would be excluded – Rule is crystal clear and does notbrook any two interpretations – Pension Scheme was sought to beGintroduced only couple of months before the VRS – It was ultimatelyimplemented by the appellant, much later in 1995 – Thus, theoccasion for making any entries for this leave period in the servicerecord, in terms of the Rules did not even arise at the stage whenthe VRS was applied – To avail the benefit of Pension Rules, an H

employee must qualify in terms of the Rules– Respondents do notdo so, as the period sought to be excluded from their qualifyingservice is one where they were admittedly not paid leave salary –Qualifying period for the VRS would have to be governed by thatScheme and cannot ipso facto be imported into the entitlement ofpension, contrary to the plain wordings of the Pension Rules –Pension Rules came into force much later, though the intention wasannounced just before the VRS – Respondents were not governedby these Rules, but by the Employees Contributory Provident FundScheme – Result may be the same as in Lillu Ram’s case, reasoningis slightly different from that view – Impugned order set aside –Interpretation of Statutes - Service Law.

Allowing the appeal, the Court

Conclusion

Allowing the appeal, the Court

HELD: 1.1 The VRS itself, more specifically clause (g),makes these very Rules applicable. Rule 21 is quite clear in itsterms, i.e., “all leave during service for which leave salary ispayable” would count. The corollary is that if an employee is notpaid for leave, that period has to be excluded from the period tobe counted for admissibility of pension. Rule 3(1)(q), whiledefining “qualifying service” provides for service rendered whileon duty “or otherwise which shall be taken into account for thepurpose of pensions and gratuities admissible under these rules.”Thus, the period of leave for which salary is payable would betaken into account for determining the pensionable service, whilethe period for which leave salary is not payable would be excluded.The Rule is crystal clear and does not brook any twointerpretations. When the words of a statute are clear andunambiguous, there cannot be a recourse to any principle ofinterpretation other than the rule of literal construction. Theendeavour to refer to Rules 27 & 28 of the Pension Rules is ofno avail, as those are dealing with the effect of interruption inservice which may result in forfeiture of past service. In thepresent case, there has been no forfeiture of past service.[Paras 20, 21][542-G, H; 543-A-C]

1.2 Insofar as the Government decision dated 28.2.1976 isconcerned, that elucidates the requirement of a prompt entryinto the service record, but this certainly cannot supersede the AB

C

DE

FG

H

ARule. The position would be no different for SR 200, SR 202 andthe other Government of India Order dated 24.6.1966. It is triteto say that as per Kelsen’s Hierarchy of Legal Norms, theGrundnorm, being the Constitution of India, the applicablehierarchy would read as under:

B“(1) The Constitution of India.

(2) Statutory Law, which may be either Parliamentary Lawor law made by the State Legislature.

(3) Delegated legislation which may be in the form of rules,regulations etc. made under the Act.C

(4) Administrative instructions which may be in the form ofGOs, Circulars etc.”

In the given facts of the present case, the respondents werenot governed by these Rules, but by the Employees ContributoryDProvident Fund Scheme. The Pension Scheme was sought to beintroduced only couple of months before the VRS, and that toowas not implemented till 1995. Not only that, it was notimplemented through the LIC but ultimately by the appellant-Corporation itself, much later in 1995. Thus, the occasion formaking any entries for this leave period in the service record, inEterms of the Rules did not even arise at the stage when the VRSwas applied. There may have been some significance to theseaspects if the Pension Rules were already applicable over a periodof time and entries had not been made, though, even there, itwould not be in supersession of the plain language of the Rule.[Paras 22, 23][543-D-H; 544-A, B]F

1.3 To avail of the benefit of Pension Rules, an employeemust qualify in terms of the Rules. In the present case, therespondents unfortunately do not do so, as the period which issought to be excluded from their qualifying service is one wherethey have admittedly not been paid leave salary. The qualifyingGperiod for the VRS would have to be governed by that Schemeand cannot ipso facto be imported into the entitlement of pension,contrary to the plain wordings of the Pension Rules. There is noconflict in this, apart from the fact that the Pension Rules cameinto force actually much later, though the intention was announced H

just before the VRS. The respondents were governed prior tothat by the Employees Contributory Provident Fund Scheme.While the result may be the same as in LilluRam’s case, ourreasoning is slightly different from that view. The impugned orderis set aside. However, to avoid any grave hardship, if anypayments have been made to the respondents, especially in viewof the interim order dated 23.7.2014, the appellant-Corporationwill not claim any refund of such amount already paid.[Para 24-27][544-B-F]

D.T.C. v. Lillu Ram (2017) 11 SCC 407 : [2007]

2 SCR 1092; Swedish Match AB v. Securities andExchange Board, India AIR (2004) SC 4219 : [2004]3 Suppl. SCR 745 – referred to.

Case Law Reference

CIVIL APPELLATE JURISDICTION: Civil Appeal No. 7159of 2014

From the Judgment and Order dated 13.10.2011 of the High Courtof Delhi at New Delhi in LPA No. 175 of 2008.

Ms. Avinish Ahlawat, Dr. Monika Gusain, Advs. for the Appellant.

Narottam Vyas, S. C. Varma, T. R. B. Sivakumar, Advs. for theRespondents.

The Judgment of the Court was delivered by SANJAY KISHAN KAUL, J. 1. The respondents are all ex-employees of the appellant/Delhi Transport Corporation (for short‘DTC’), who availed of the Voluntary Retirement Scheme (for short‘VRS’). The respondents have, however, been held disentitled to pensionon account of exclusion of period when they remained absent withoutauthorisation for which period they were held not entitled to salary. InD.T.C. v. Lillu Ram,[1] such exclusion was upheld with the consequencethat the ex-employees would not get pensionary benefits, having notcompleted 10 years of qualifying service. In the present appeal, two A

B

C

D

E

F

G

H

AHon’ble Judges of this Court, after examining LilluRam’s[2 ]case opinedthat a reconsideration by a larger Bench, of that view, was required. Asa sequitur, the present appeal has been placed before us.

2. A perusal of the reference order dated 9.11.2016, shows thatthe disagreement with the view taken in Lillu Ram[3 ]case emanated onBvarious accounts: (a) if the employee has been sanctioned leave withoutpay, why such period should be treated asa period of unauthorisedabsence; (b) non-consideration of relevant rules such as Rules 27 & 28of the Central Civil Services (Pension) Rules, 1972 (hereinafter referredto as the ‘Pension Rules’) and FR 17-A of the Fundamental Rules; (c)no adverse effect should be visited on the employee to receive pension,Cunless given notice by the appropriate authority, by an entry in the servicebook or through other notice, that his absence will be treated asunauthorised absence and will not be counted towards qualifying servicefor pension; (d) the VRS is permissible only on completion of 10 yearsof service and, thus, it may be unjust and harsh to inflict the employeeDwith adverse consequences, in the absence of such notice.

3. The relevant facts for determination of the issue before us arethat the employees of the appellant-Corporation were governed by theEmployees Contributory Provident Fund Scheme. In terms of OfficeOrder No.16 dated 27.11.1992, the introduction of a pension scheme inEDTC as applicable to the Central Government employees was announced,on sanction having been obtained from the Central Government. Thispension scheme was to be operated by the LIC on behalf of DTC andthe date of effect of the pension scheme was retrospective,w.e.f. 3.8.1981,with the option to the existing employees and those who retired w.e.f.3.8.1981 to opt for this pension scheme or continue to be governed byFthe Employees Contributory Provident Fund Scheme. Prospectively,the pension scheme was to apply compulsorily. The retired employees,however, were required to refund the employer’s share under theEmployees Provident Fund Act, in the event of their opting for the pensionscheme.G

4. It appears that despite all intentions, the scheme that had to beoperated by LIC was not implemented till 1995, when it was implementedby the appellant-Corporation itself. The other development in proximityto the announcement of the scheme was the announcement of the VRS2 (supra)H3 (supra)

on 3.3.1993. In order to avail of this Scheme, the eligibility conditionsrequired an employee to have completed 10 years of service in theappellant-Corporation, or completed 40 years of age. Sub-clause (g) ofClause 4 of the Scheme provided for pensionary benefits as per OfficeOrder No.16 dated 27.11.1992.

5. It appears that considerable litigation ensued in respect of boththese aspects, on various accounts,inter alia on the issue of the eligibilityfor pension for persons who had put in 10 years or more of qualifyingservice, but less than 20 years. All these different issues have beensettled in proceedings before the Delhi High Court or before this Court.Suffice to say that there isno controversy now, in view of the judicialpronouncements that there is no embargo in the pension rules that anemployee having put in more than 10 years of service but less than 20years would earn pro rata pension if he avails of the VRS.

6. Insofar as the present controversyis concerned, it appears thatthe Delhi High Court opined in favour of the employees and SLPs weredismissed leaving the question of law open till the appellant-Corporationpointed out that the question of law needed to be settled, in view of alarge number of cases coming up on this aspect. It is in thesecircumstances that the issue was examined in LilluRam’s[4] case. Areference was made to Rule 3(1)(q) of the Pension Rules, which readsas under:

“3. Definitions:

In these rules, unless the context otherwise requires –

(1) (a) to (p) xxxx

xxxxxxxx

xxxx

(q) ‘Qualifying Service’ means service rendered while on duty orotherwise which shall be taken into account for the purpose ofpensions and gratuities admissible under these rules;”

7. It was opined that since the leave availed of was treatedasabsence from dutyin an unauthorisedmanner, that period ought not tobe counted towards the “qualifying service” as the very definition of“qualifying service” means service rendered while on duty or otherwise.Since the Pension Rules had been adopted, the provisions of the PensionRules would have to be applied for determining the eligibility. A referencewas also made to Rule 49(1) of the Pension Rules, which reads as under:

4 (supra)

A

B

C

D

E

F

G

H

A“49. Amount of Pension:

(1) In the case of a Government servant retiring in accordancewith the provisions of these rules before completing qualifyingservice of ten years, the amount of service gratuity shall becalculated at the rate of half month’s emoluments for everyBcompleted six monthly period of qualifying service.”

The conclusion, thus reached was that absence without sanctionis unauthorised leave, which would have to be excluded fromthe periodof qualifying service, for determining the period of 10 years of qualifyingservice for admissibility of pension, and thatwhen a person is entitled toCseek VRS on completion of 10 years of service, that would not ipsofacto imply that this period would also have to be counted for purposesof admissibility of pension.

8. On behalf of the appellant-Corporation, Ms.AvnishAhlawat,learned counsel sought to draw sustenance for her argument from RuleD21, which reads as under:

“21. Counting of periods spent on leave

All leave during service for which leave salary is payable [and allextraordinary leave granted on medical certificate] shall count asqualifying service :

E

Provided that in the case of extraordinary leave [other thanextraordinary leave granted on medical certificate], the appointingauthority may, at the time of granting such leave, allow the periodof that leave to count as qualifying service if such leave is grantedto a Government servant –

F

(i) omitted.

(ii) due to his inability to join or rejoin duty on account of civilcommotion; or

(iii) for prosecuting higher scientific and technical studies.”

G

9. It was, thus, her contention that when the Rule itself is clearthat the counting of period for pension, in respect of leave availed of,would be admissible only where “leave salary is payable,” and there areonly two exceptions as stipulated in the proviso, it was not for this Courtto add or subtract from the Rule.

H

DELHI TRANSPORT CORPORATION v. BALWAN SINGH[SANJAY KISHAN KAUL, J.]

10. She further contended that reference to Rules 27 & 28 of thePension Rules would not be appropriate as those provisions dealt withthe effect of interruption in service and condonation of interruption inservice. The Rules read as under:

“27. Effect of interruption in service

(1) An interruption in the service of a Government servant entailsforfeiture of his past service, except in the following cases:- (a) authorized leave of absence; (b) unauthorized absence in continuation of authorized leave ofabsence so long as the post of absentee is not filled substantively;

(c) suspension, where it is immediately followed by reinstatement,whether in the same or a different post, or where the Governmentservant dies or is permitted to retire or is retired on attaining theage of compulsory retirement while under suspension; (d) transfer to non-qualifying service in an establishment underthe control of the Government if such transfer has been orderedby a competent authority in the public interest; (e) joining time while on transfer from one post to another.

(2) Notwithstanding anything contained in sub-rule (1), the[appointing authority] may, by order, commute retrospectively theperiods of absence without leave as extraordinary leave.

28. Condonation of interruption in service (a) In the absence of a specific indication to the contrary in theservice book, an interruption between two spells of civil servicerendered by a Government servant under Government includingcivil service rendered and paid out of Defence Services Estimatesor Railway Estimates shall be treated as automatically condonedand the pre-interruption service treated as qualifying service.

(b) Nothing in Clause (a) shall apply to interruption caused byresignation, dismissal or removal from service or for participationin a strike.

(c) The period of interruption referred to in Clause (a) shall notcount as qualifying service.”

A

B

C

D

E

F

G

H

A

11. The contention, thus, was that an interruption in service wouldentail forfeiture of past service, unless it fell within clauses (a) to (e) ofsub-rule (1) of Rule 27 of the Pension Rules.

12. FR 17-A of the Fundamental Rules also deals with unauthorisedabsence without prejudice to the provisions of Rule 27 of the PensionBRules but none of those provisions would apply in the facts of the presentcase.

13. On the other hand, learned counsel for the respondents soughtto draw our attention to the Government of India decision M.F., O.M.No.F.11 (3)-E. V (A)/76 dated 28.2.1976, reproduced as “GovernmentCof India’s decisions” set out just below Rule 21 of the Pension Rules,which reads as under:

“GOVERNMENT OF INDIA’S DECISIONS

(1) Need for making proper entries for treatment ofextraordinary leave for pensionary benefits. - Under Rule21 of the CCS (Pension) Rules, 1972, extraordinary leave grantedon medical certificate qualifies for pension. The AppointingAuthority may, at the time of granting extraordinary leave, alsoallow the period of such leave to count as qualifying for pension ifthe leave is granted to a Government servant –

D

E

(i) due to his inability to join or rejoin duty on account of civilcommotion, or

(ii) for prosecuting higher technical and scientific studies.

Extraordinary leave taken on other grounds is treated as non-qualifying and, therefore, a definite entry is to be made in theservice records to that effect. Entries regarding service beingqualifying or otherwise are required to be made simultaneouslywith the event. Even where this is not done, it should still be possibleto rectify the omission during the period allowed for preparatoryaction, i.e., from two years in advance of the retirement date upto eight months before retirement. At the end of that period,however (i.e., when the actual preparation of the pension papersis taken in hand), no further enquiry into past events or check ofpast records should be undertaken. Specific entries in the servicerecords regarding non-qualifying periods will be taken note of and F

G

H

such periods excluded from the service. All spells of extraordinaryleave not covered by such specific entries will be deemed to bequalifying service.”

14. Learned counsel emphasised that a definite entry is requiredto be made inthe service record latest by 8 months beforeretirement.Allspells of extraordinary leave not covered by such specificentry would be deemed to be qualifying service.

15. Learned counsel also drew our attention to SR 200 oftheSupplementary Rules (hereinafter referred to as the ‘SR’), whichreads as under:

“S.R. 200. Every period of suspension from employment and everyother interruption of service must be noted, with full details of itsduration, in an entry made across the page of the Service Bookand must be attested by the Attesting Officer. It is the duty of theAttesting Officer to see that such entries are promptly made.”

16. Learned counsel also referred to the Government of IndiaOrder No.M.F., O.M. No.F.18 (7)-E. V (B)/65-Part-V dated 24.6.1966,the relevant extract of which reads as under:

“Government of India’s Orders

(1) Annual verification of services. -

xxxx xxxxxxxxxxxx

NOTE 2. – Questions affecting pension or the pensionable serviceof a Government servant which for their decision depend oncircumstances known at the time, should be considered as soonas they arise and should not be left over for consideration until theGovernment servant retires or is about to retire. Definite decisionsshould be arrived at on all such questions in consultation with theAudit Officer and/or the Accounts Officer, as the case may be,where necessary and recorded in the Service Book quotingreference to the orders of the Competent Authority.

…. …. …. …. …. ….”

(2) Need for proper maintenance of Service Book toeliminate delay in payment of pension. –

xxxxxxxx

xxxxxxxx

A

B

C

D

E

F

G

H

A

A3. The orders of the Competent Authority regarding the countingor otherwise of periods of extraordinary leave or periods precedingbreaks in service as qualifying for pension should be obtainedinvariably at the same time as the occasion arises and not later.Such orders should be noted in the Service Book. Unless otherwiseshown in the Service Book, it will be presumed that the orders ofBCompetent Authority have been obtained and the periods ofextraordinary leave and periods preceding break in service willcount for pension.

…. ….

….

….

…. ….”

…. ….

….

….

…. ….”

17. Learned counsel, thus, emphasised the importance of everyinterruption of service required to be noted with full details of its duration,and its entry made in the service book, as also the inadvisability ofconsideration of question affectingpension or pensionable service beingleft until the Government servant retires or is about to retire.

C

18. Learned counsel also contended that possibly, the respondentsmay not have availed of the VRS had they been told that they would notget the benefit of pension in view of what is stated aforesaid by theappellant-Corporation, and to deprive them subsequently of it would beunfair and unjust, apart from itbeing an adverse decision madewithoutnotice to them.

D

E19. We have examined the contentions of learned counsel for theparties and the judgment in LilluRam’s[5]case and the order of referencedated9.11.2016.

20. In our view,the only aspect which is required to be consideredis the requirement of the specific rule of the Pension Rules, whichFprovides for admissibility of pension. No one, including the respondentscan be permitted to plead that they would be unaware of the PensionRules, which have a statutory force and whose benefit they seek toavail. In fact, the VRS itself, more specifically clause (g), makes thesevery Rules applicable. Rule 21 is quite clear in its terms, i.e., “all leaveGduring service for which leave salary is payable” would count. Thecorollary is that if an employee is not paid for leave, that period has to beexcluded from the period to be counted for admissibility of pension. Rule3(1)(q), while defining “qualifying service” provides for service rendered 5 (supra)H

DELHI TRANSPORT CORPORATION v. BALWAN SINGH[SANJAY KISHAN KAUL, J.]

while on duty “or otherwise which shall be taken into account for thepurpose of pensions and gratuities admissible under these rules.” Thus,theperiod of leave for which salary is payable would be taken into accountfor determining the pensionable service, while the period for which leavesalary is not payable would be excluded. The Rule is crystal clear anddoes not brook any two interpretations. It is a well settled principle ofinterpretation that when the words of a statute are clear and unambiguous,there cannot be a recourse to any principle of interpretation other thanthe rule of literal construction.[6]

21. The endeavour to refer to Rules 27 & 28 of the Pension Rulesis of no avail, as those are dealing with theeffect of interruption in servicewhich may result in forfeiture of past service. In the present case, therehas been no forfeiture of past service.

22. Insofar as the Government decision dated 28.2.1976 isconcerned, that elucidates the requirement ofa prompt entry intotheservice record, but thiscertainly cannot supersede the Rule. Theposition would be no different for SR 200, SR 202 and theotherGovernment of India Order dated 24.6.1966. It is trite to say that asperKelsen’s Hierarchy of Legal Norms, the Grundnorm, being theConstitution of India, the applicable hierarchy would read as under:

“(1) The Constitution of India.

(2) Statutory Law, which may be either Parliamentary Law orlaw made by the State Legislature.

(3) Delegated legislation which may be in the form of rules,regulations etc. made under the Act.

(4) Administrative instructions which may be in the form of GOs,Circulars etc.”

23. In the given facts of the present case, we will have to takenote of an important aspect, i.e., the respondents were not governed bythese Rules, but by the Employees Contributory Provident Fund Scheme.The Pension Scheme was sought to be introduced only couple of monthsbefore the VRS, and that too was not implemented till 1995. Not onlythat, it was not implemented through the LIC but ultimately by theappellant-Corporation itself, much later in 1995. Thus, the occasion for 6Swedish Match AB v. Securities and Exchange Board, India AIR (2004) SC 4219

A

B

C

D

E

FG

H

Amaking any entries for this leave period in the service record, in terms ofthe Rules did not even arise at the stage when the VRS was applied.There may have been some significance to these aspects if the PensionRules were already applicable over a period of time and entries had notbeen made, though, even there, it would not be in supersession of theplain language of the Rule.

B

24. We have, thus, no hesitation in coming to the conclusion thatto avail of the benefit of Pension Rules, an employee must qualify interms of the Rules. In the present case, the respondents unfortunatelydo not do so, as the period which is sought to be excluded from theirqualifying service is one where they have admittedly not been paid leaveCsalary. The qualifying period for the VRS would have to be governed bythat Scheme and cannot ipso factobe imported into the entitlement ofpension, contrary to the plain wordings of the Pension Rules. We see noconflict in this, apart from the fact that the Pension Rules came intoforce actually much later, though the intention was announced just before Dthe VRS. The respondents were governed prior to that by the EmployeesContributory Provident Fund Scheme.

25. We may, however, notice here that while the result may bethe same as in LilluRam’s[7]case, our reasoning is slightly different fromthat view.

E

26. We, thus, allow the appeal and set aside the impugned order,leaving the parties to bear their own costs.

27. However, to avoid any grave hardship, if any payments havebeen made to the respondents, especially in view of the interim orderdated 23.7.2014, the appellant-Corporation will not claim any refund ofFsuch amount already paid.

Divya Pandey

Appeal allowed.

G

7 (supra)H