PREM SINGH versus STATE OF UTTAR PRADESH & ORS. on 2 September 2019

[2019] 11 S.C.R. 1075

PREM SINGH

v.

STATE OF UTTAR PRADESH & ORS.

(Civil Appeal No. 6798 of 2019)

SEPTEMBER 02, 2019

[ARUN MISHRA, S. ABDUL NAZEER ANDM. R. SHAH, JJ.]

Service Law:

Pension - Computation of qualifying service for grant ofpension - Period of work-charged services - Whether can beincluded in the qualifying service - Employee's service in work-charged establishment for a period of about 37 years - Thereafterregularized in the establishment - On superannuation, claim of theemployee for grant of pension by counting the period spent in thework-charged establishment - Claim denied - Writ petition dismissed

- Special appeal also dismissed - Appeal to Supreme Court - Held:In view of r.3(8) of Retirement Benefits Rules and Regulations, 361,368 and 370 of Civil Services Regulations and Para 669 ofFinancial Handbook Vol. VI relating to engagement of employeesin the work-charged establishment, employees in work-chargedestablishment are not entitled to pension - In the present caseappointment of work-charged employee was on monthly salary andthe employee was also required to cross the efficiency bar - Therewas nothing to indicate qualitative difference of the employee fromthe regular employees - Rather, the employer had misused the veryconcept of work-charged employment on exploitative terms for thework which was regular and perennial in nature - Note to r. 3(8)of 1961 Rules provides for counting the period of work-chargedemployment if that period is between two temporary employmentsor in between temporary and permanent employment - The Note isirrational and discriminatory and makes impermissible classificationin not counting the work-charged employment if it is renderedbefore regularization - In order to make the rule valid and non-discriminatory, Note to r.3(8) is read down that work-chargedservices rendered even prior to regularization, contingency paidfund employees or non-pensionable establishment shall also be

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Acounted towards the qualifying service even if such service is notpreceded by temporary or regular appointment in a pensionableestablishment - The provision contained in Regulation 370 and theinstructions contained in Para 669 of the Financial Handbook isstruck down - Services of some other work-charged employees, whosuperannuated without being regularized even after renderingBservice of 30-40 years ought to have been regularized under theGovernment instructions and also as per the decision in *UmaDevi case - Services of such employees be treated regular andhence be treated entitled to receive pension - Uttar PradeshRetirement Benefits Rules, 1961 - r. 3(8) - Uttar Pradesh CivilCServices Regulations - Regulation 370 - Financial Handbook Vol.VI - Para 669.Allowing the appeals filed by the employees and dismissingthose filed by the State/employer, the Court HELD: 1.1 The qualifying service is the one which is inDaccordance with the provisions of Regulation 368 of UttarPradesh Civil Services Regulations i.e. holding a substantivepost on a permanent establishment. The proviso to Rule 3(8)of Uttar Pradesh Retirement Benefits Rules, 1961 clarify thatcontinuous, temporary or officiating service followed withoutEinterruption by confirmation in the same or any other post is alsoincluded in the qualifying service except in the case of periodsof temporary and officiating service in a non-pensionableestablishment. The service in work-charged establishment andperiod of service in a post, paid from contingencies shall alsonot count as qualifying service. The Note appended to Rule 3(8)Fcontains a clear provision to count the qualifying servicerendered in work-charged, contingency paid and non-pensionable establishment to be counted towards pensionableservice, in the exigencies provided therein. [Paras 10 and 11][1085-F-H; 1086-B]G

1.2 The provisions contained in Regulation 370 of the CivilServices Regulations excludes service in a non-pensionableestablishment, work-charged establishment and in a post, paidfrom contingencies from the purview of qualifying service. UnderRegulation 361 of the Civil Services Regulations, the servicesHmust be under the Government and the employment must be substantive and permanent basis. Para 669 of the FinancialHandbook Vol. VI relating to engagement of employees in thework charged establishment provides that except in the case asmentioned thereunder the members of work-chargedestablishment are not entitled to any pension or to leave salaryor allowances. [Paras 12, 13 and 14] [1086-C-D; 1088-C]

1.3 The appointment of the work-charged employee in thepresent case had been made on monthly salary and they wererequired to cross the efficiency bar also. No material indicatingqualitative difference from regular employees has been pointedout except making bald statement. The appointment was notmade for a particular project which is the basic concept of thework charged employees. Rather, the very concept of work-charged employment has been misused by offering theemployment on exploitative terms for the work which is regularand perennial in nature. The work-charged employees had beensubjected to transfer from one place to another like regularemployees as apparent from documents placed on record. [Para29] [1104-E-G]

1.4 It was unfair on the part of the State Government andits officials to take work from the employees on the work-charged basis. They ought to have resorted to an appointmenton regular basis. The taking of work on the work-charged basisfor long amounts to adopting the exploitative device. Later on,though their services have been regularized, the period spentby them in the work-charged establishment has not beencounted towards the qualifying service. Thus, they have not onlybeen deprived of their due emoluments during the period theyserved on less salary in work charged establishment but havealso been deprived of counting of the period for pensionarybenefits as if no services had been rendered by them. The Statehas been benefitted by the services rendered by them in theheydays of their life on less salary in work-chargedestablishment. [Para 30] [1105-C-E]

1.5 In view of the note appended to Rule 3(8) of the 1961Rules, there is a provision to count service spent on workcharged, contingencies or non pensionable service, in case, a AB

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Aperson has rendered such service in a given between period oftwo temporary appointments in the pensionable establishmentor has rendered such service in the interregnum two periods oftemporary and permanent employment. The work-chargedservice can be counted as qualifying service for pension in theaforesaid exigencies. [Para 31] [1105-F]

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1.6 Once regularization had been made on vacant posts,though the employee had not served prior to that on temporarybasis, considering the nature of appointment, though it was nota regular appointment it was made on monthly salary andthereafter in the pay scale of work-charged establishment theCefficiency bar was permitted to be crossed, it would be highlydiscriminatory and irrational because of the rider contained inNote to Rule 3(8) of 1961 Rules, not to count such serviceparticularly, when it can be counted, in case such service issandwiched between two temporary or in-between temporaryDand permanent services. There is no rhyme or reason notto count the service of work-charged period in case it has beenrendered before regularisation. [Para 32] [1105-G-H; 1106-A-B]

1.7 An impermissible classification has been made underERule 3(8). It would be highly unjust, impermissible and irrationalto deprive such employees benefit of the qualifying service.Service of work-charged period remains the same for all theemployees, once it is to be counted for one class, it has to becounted for all to prevent discrimination. The classificationcannot be done on the irrational basis and when respondents areFthemselves counting period spent in such service, it would behighly discriminatory not to count the service on the basis offlimsy classification. The rider put on that work-charged serviceshould have preceded by temporary capacity is discriminatoryand irrational and creates an impermissible classification. [ParaG32] [1106-B-D]

1.8 As it would be unjust, illegal and impermissible tomake aforesaid classification to make Rule 3(8) valid and nondiscriminatory, the provisions of Rule 3(8) has to be read downand held that services rendered even prior to regularisation inHthe capacity of work-charged employees, contingency paid fund employees or non-pensionable establishment shall also becounted towards the qualifying service even if such service isnot preceded by temporary or regular appointment in apensionable establishment. [Para 33] [1106-D-E]

1.9 In view of the Note appended to Rule 3(8), which hasbeen read down, the provision contained in Regulation 370 ofthe Civil Services Regulations has to be struck down as alsothe instructions contained in Para 669 of the Financial Handbook.[Para 34] [1106-F]

1.10 In view of reading down Rule 3(8) of the U.P.Retirement Benefits Rules, 1961, the services rendered in thework-charged establishment shall be treated as qualifyingservice under the aforesaid rule for grant of pension. [Para 36][1107-C]

Punjab State Electricity Board & Anr. v. Narata Singhand Anr. (2010) 4 SCC 317 : [ 2010] 3 SCR 27 ;Punjab State Electricity Board v. Narata Singh (2010)4 SCC 317: [2010] 3 SCR 27 - relied on.

Jaswant Singh & Ors. v. Union of India & Ors. (1979)4 SCC 440 : [1980] 1 SCR 420; State of Rajasthan v.Kunji Raman (1997) 2 SCC 517 : [1996] 10 Suppl.SCR255; Punjab State Electricity Board v. JagjiwanRam (2009) 3 SCC 661 : [2009] 3 SCR 209 -distinguished.

Kesar Singh v. the State of Punjab AIR 1988 Punjaband Haryana 265 - approved.

2. There are some of the employees who have not beenregularized in spite of having rendered the services for 30-40or more years whereas they have been superannuated. As theyhave worked in the work-charged establishment, not against anyparticular project, their services ought to have been regularizedunder the Government instructions and even as per the decisionof this Court in *Uma Devi case, wherein it was laid down thatin case services have been rendered for more than ten yearswithout the cover of the Court's order, as one time measure,the services be regularized of such employees. Thoseemployees who have worked for ten years or more should havebeen regularized. It would not be proper to regulate them for A

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Aconsideration of regularisation as others have been regularised.It is directed that their services be treated as a regular one.However, it is made clear that they shall not be entitled toclaiming any dues of difference in wages, had they beencontinued in service regularly before attaining the age ofsuperannuation. They shall be entitled to receive the pensionBas if they have retired from the regular establishment and theservices rendered by them right from the day they entered thework-charged establishment shall be counted as qualifyingservice for the purpose of pension. [Para 35] [1106-G-H; 1107-A-B]

C*Secretary, State of Karnataka & Ors. v. Uma Devi(2006) 4 SCC 1 : [2006] 3 SCR 953 - followed.

CIVIL APPELLATE JURISDICTION : Civil Appeal No. 6798of 2019.

From the Judgment and Order dated 21.07.2009 of the HighFCourt of Judicature at Allahabad in Special Appeal No. 811 of 2009.

With

Civil Appeal Nos. 6804, 6799-6803, 6938-6942, 6805, 6806, 6937,6943, 6810, 6944, 6945, 6808 6809, 6946, 6825, 6947, 6948, 6949, 6811,6812, 6807, 6950, 6813, 6951, 6952, 6953, 6954, 6955, 6956, 6957, 6826,G6958, 6959, 6960, 6961, 6962, 6963, 6964, 6965, 6827, 6819, 6828, 6816,6817, 6815, 6824, 6818, 6814, 6834, 6823. 6822, 6821, 6820, 6833, 6838,6832, 6829, 6831, 6830, 6844, 6835, 6839, 6840, 6837, 6836, 6843, 6853,6846, 6841, 6842, 6845, 6856, 6855, 6858, 6852, 6847, 6850, 6857, 6859,6848, 6849, 6860, 6851, 6864, 6861, 6862, 6854, 6863, 6866, 6869, 6877,H6870, 6868, 6876, 6874, 6879, 6865, 6875, 6871, 6878, 6867, 6873, 6872, 6882, 6881, 6884, 6880, 6883, 6900, 6885, 6887, 6886, 6888, 6889, 6890,6891, 6895, 6892, 6896, 6897, 6893, 6898, 6894, 6901, 6899, 6904, 6903,6905, 6902, 6927-6929, 6906, 6907, 6908, 6909, 6910, 6911, 6912, 6930,6913, 6914, 6915, 6916, 6917, 6918, 6919, 6921, 6923, 6925, 6920, 6924,6922, 6931, 6932, 6926 of 2019, MA 1541/2018 in SLP(C) 19310/2017,MA 1542/2018 in SLP(C) 19234/2017, MA 1544/2018 in SLP(C)19346/2017, MA 1545/2018 in SLP(C) 19350/2017, MA 1546/2018 inSLP(C) 19740/2017, MA 1543/2018 in SLP(C) 19297/2017.

Raghavendra Singh, AG, Ms. Aishwarya Bhati, AAG, KuldeepSingh Parihar, DAG, Sanat Kumar, AAG, Amarendra Sharan, AnandGrover, Mahabir Singh, Ms. Sukriti Bhatnagar, Sanchit Guru, SamarthKhanna, Shourya Bari, Mrs. Rachna Gupta, Ms. Rachana Srivastava,Ashutosh Sharma, Ms. Umme Salma, Aviral Saxena, Anurag Pandey,Ms. Priyam Lizmary Cherian, Ms. Preeti Singh, Gagan Deep Sharma,Dr. Swati Jindal Garg, Shivam Jaiswal, Rajeev Kumar Dubey, AbhishekSingh Tomar, Nitin, Ashiwan Mishra, Kamlendra Mishra, Ajay VikramSingh, Ms. Priyanka Singh, Kamlesh Anand, Ms. Rachana SrivastavaAshutosh Kumar Sharma, Harish Chandra Pant, Sandeep Garausa, AnisAhmed Khan, S. S. Rawat, Ms. Namita Chaudhary, Ms. RachnaGandhi, Ajay Vikram Singh, Mukesh Kumar Sharma, Ms. ShwetaShukla, Ms. Vanshaja Shukla, Anurag Pandey, Dinesh Kumar Garg,Abhishek Garg, Dhananjay Garg, Deepak Mishra, Sudarshan SinghRawat, Nachiketa Joshi, Jaswant Singh Rawat, Vikas Negi, VirendraS. Rawat, Atul Sharma, Ms. Manju Jetley, S. R. Setia, Mithilesh KumarSingh, Himanshu Tyagi, Abhishek Singh, Farrukh Rasheed, Khalid Israr,Anand Mishra, Amrendra Kumar Singh, Ms. Vandana Kumar, Ms.Anisha Upadhyay, Surender Kumar, Pawan Upadhyay, Nishant Kumar,B. K. Pal, Ajit Singh Pundir, Arijeet Singh, D.V. Singh, R. Karrupiah,Aditya Giri, Abhishek Singh, Manohar Pratap, Sanpreet Singh Ajmani,Ayush Negi, Ms. Vishakha Upadhyay, Ms. Vanshaja Shukla, M.P. Pant,Ankur Yadav, Aakash Kumar, Rajesh Pathak, Abhishek Chakraborty,Pramod Kumar, Rajesh Pathak, Sumit Kumar, Nishant RamakantraoKatneshwarkar, Anoop Kandari, Ravindra S. Garia, Harshit Sanwal,Janmejay Verma, Ms. Akansha Verma, S. K. Verma, Pradeep Kr.Yadav, Ms. Sheenu Chauhan, Sanjeev Malhotra, Ms. Vijay Laxmi,Anand Vardhan Maitreya, Satish Kumar, Ardhendumauli Kumar Prasad,Ankur Yadav, Mithilesh Kr. Singh, Tarun Verma, Ms. Manju Singh,Advs. for the appearing parties.

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AThe Judgment of the Court was delivered by ARUN MISHRA, J.

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AThe Judgment of the Court was delivered by ARUN MISHRA, J.

1. The question involved in the present matters is whether Rule3(8) of the U.P. Retirement Benefit Rules, 1961 (in short “Rules of1961”) and Regulation 370 of the Civil Services Regulation of UttarBPradesh should be struck down having regard to the fact that this Courthas upheld the decision regarding pari materia provision enacted inthe State of Punjab which excluded computation of the period of work-charged services from qualifying service for pension. This Court hasaffirmed the decision of the High Court of State of Punjab and HaryanaCrendered in Kesar Singh v. the State of Punjab, AIR 1988 Punjaband Haryana 265.2. A Division Bench of this Court has referred the matter to beconsidered by a larger bench. Hence the matter is before us.

3. The facts are being narrated from Prem Singh v. State ofDUttar Pradesh (Special Leave Petition (Civil) No.4371 of 2011). Theappelant was appointed as a Welder in the year 1965 in a work-chargedestablishment (Ram Ganga River Valley Project, Kalagarh). He wastransferred from one place to another and thereafter ultimately theSelection Committee recommended for regularization of his services.His services were regularized on 13.3.2002 and was posted as PumpEOperator in the pay scale of Rs.3050-4590 in the regular establishment.He superannuated on 31.1.2007. Then he filed a writ petition in theHigh Court on 31.7.2008 to count period spent in the work-chargedestablishment as qualifying service under the Rules of 1965. The HighCourt directed to submit a representation, accordingly it was filed whichFmet with rejection on 12.12.2008. Yet another representation filed alsomet with the same fate vide order dated 23.3.2009. The writ petitionand special appeal had been dismissed.

4. The appellant has placed reliance upon the decision of thisCourt in Habib Khan vs. State of Uttarakhand (Civil AppealGNo.10805-10807 of 2017) in which a Division Bench of this Courtconsidering Regulation 370 of the Civil Service Regulations which hasbeen approved in the State of Uttarakhand after its bifurcation fromthe State of Uttar Pradesh, held that Regulation 370 is pari materiaprovision to the one as contained in Rule 3.17 (ii) of the Punjab CivilServices Rules which had been struck down by a Full Bench decisionHof Punjab and Haryana High Court in Kesar Chand vs. State of Punjab and Ors. (supra). The challenge to the same was rejected bythis Court. The Court has further relied on Punjab State ElectricityBoard & Anr. v. Narata Singh and Anr., (2010) 4 SCC 317 in whichit has been observed that the High Court of Punjab and Haryana wasperfectly justified in striking down Rule 3.17(ii) of Punjab Civil ServicesRules resulting in obliteration of the distinction made in said rule betweentemporary and officiating service and work-charged service. This Courtheld that period of work-charged service should be counted forcomputation of qualifying service for grant of pension.

5. This Court in other cases has followed the aforesaid decisionin Habib Khan v. State of Uttarakhand (supra) giving relief to theemployees. In Ram Deo Tiwari v. State of Uttar Pradesh & Ors.(Civil Appeal No.2896 of 2018) decided on 16.3.2018, the decision ofHabib Khan (supra) has been followed. This Court has dismissed theReview application filed in the case of Habib Khan (supra).

6. It is submitted by Shri Raghuvendra Singh, learned AdvocateGeneral appearing for the State of Uttar Pradesh that there is adifference in the Rules and Regulations in Uttar Pradesh and Punjab.The rule of Punjab was struck down by the High Court in Kesar Chandvs. State of Punjab (supra). In Punjab, there was deemed regularizationwhereas in State of Uttar Pradesh services have been regularized ona particular date; as such that date has to be taken as thecommencement of the services for the qualifying period for a pensionunder Rule 3(8) of the Rules. He has also pointed out the conceptualdifference between regular and work-charged employees. Work-charged employees are not appointed by following the same procedureas that of regular employees. Work pressure and accountability alsodiffer. He has further submitted that work-charged services cannot betreated as regular service even for Assured Career Progression (ACP).The Government has the power to frame different rules for differentclasses of employees as such Rule 3(8) of the Rules and Regulation370 cannot be said to be arbitrary and discriminatory. Though, work-charged employees can claim protection under the Industrial DisputesAct, 1947 but cannot be treated at par with employees of regularestablishment. Treating them similarly would be like giving similartreatment to unequal classes which would be against the Right toEquality provided under Article 14 of the Constitution of India. Work-charged employee forms a separate and distinct class. They cannot betreated at par with regular, temporary or ad-hoc employees. The work A

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Ais qualitatively different as such services in the work-chargedestablishment cannot be clubbed with the services of a regularestablishment unless a specific provision to that effect is made. Givingthe benefit of pension to work-charged employees is against the basicconcept of pension which is admissible to a regular employee. Thepension cannot be claimed as of right.B

7. He further submitted that the decision in Kesar Chand (supra)is per incuriam. Hence relied on the Secretary, State of Karnatakav. Uma Devi & Ors. 2006 (4) SCC 1. It is further submitted thateconomy of the State would collapse in case pension is paid treatingthe work charged period as qualifying service. It is practically difficultCand financial burden would be cast upon the State in case these petitionsare allowed. The pension can be paid only under the rules. In NarataSingh (supra) validity of Punjab Regulations has not been examined.Since there is a reference made by the Division Bench doubting thecorrectness of Habib Khan (supra), the same deserves to be held perDincuriam and cannot be said to be laying down a good law.

8. We first consider the provisions contained in the Uttar PradeshRetirement Benefits Rules 1961 (for short, “the 1961 Rules”). Rule 3(8)of Rules of 1961 which contains the provisions in respect of qualifyingservice is extracted hereunder:

E“Rule 3. In these rules, unless is anything repugnant in the subjector context-

(1) ……..

(2) ……..

(8) “Qualifying service” means service which qualifies forFpension in accordance with the provisions of Article 368 of theCivil Service Regulations.

Provided that continuous temporary or officiating service underthe Government of Uttar Pradesh followed without interruptionby confirmation in the same or any other post except- G

(i) periods of temporary or officiating service in a non-pensionable establishment.

(ii) periods of service in a work-charged establishment and

(iii) periods of service in a post paid from contingencies shallalso count as qualifying service.

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Note:-If service rendered in a non-pensionable establishmentwork-charged establishment or in a post paid from contingenciesfalls between two periods of temporary service in a pensionableestablishment or between a period of temporary service andpermanent service in a pensionable establishment, it will notconstitute an interruption of service.”

9. Regulations 361, 368 and 370 of Uttar Pradesh Civil ServicesRegulations are also relevant. They are extracted hereunder:

“361. The service of an officer does not qualify for pension unlessit conforms to the following three conditions: - First - The service must be under Government.

Second - The employment must be substantive and permanent.

These three conditions are fully explained in the followingSection.

368. Service does not qualify unless the officer holds asubstantive office on a permanent establishment.

370. Continuous temporary or officiating service under theGovernment of Uttar Pradesh followed without interruption byconfirmation in the same or any other post shall qualify, except-

(i) periods of temporary or officiating service in non-pensionable establishment;

(ii) periods of service in work charged establishment; and

(iii) periods of service in a post paid from contingencies.”

10. The qualifying service is the one which is in accordance withthe provisions of Regulation 368 i.e. holding a substantive post on apermanent establishment. The proviso to Rule 3(8) clarify thatcontinuous, temporary or officiating service followed without interruptionby confirmation in the same or any other post is also included in thequalifying service except in the case of periods of temporary andofficiating service in a non-pensionable establishment. The service inwork-charged establishment and period of service in a post paid fromcontingencies shall also not count as qualifying service.

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A11. The Note appended to Rule 3(8) contains a provision that ifthe service is rendered in a non-pensionable establishment, work-chargedestablishment or in a post paid from contingencies, falls between twoperiods of temporary service in a pensionable establishment or betweena period of temporary service and permanent service in a pensionableestablishment, it will not constitute an interruption of service. Thus, noteBcontains a clear provision to count the qualifying service rendered inwork-charged, contingency paid and non-pensionable establishment tobe counted towards pensionable service, in the exigencies providedtherein.

12. The provisions contained in Regulation 370 of the CivilCServices Regulations excludes service in a non-pensionableestablishment, work-charged establishment and in a post paid fromcontingencies from the purview of qualifying service. Under Regulation361 of the Civil Services Regulations, the services must be under theGovernment and the employment must be substantive and permanentbasis.D

13. The provisions contained in the Financial Handbook Vol. VIrelating to engagement of employees in the work charged establishmentin Paras 667, 668 and 669, are extracted hereunder:

“667. Work-charged establishment will include such establishmentas is employed upon the actual execution, as distinct from theEgeneral supervision, of a specific work or sub-works of a specificproject or upon the subordinate supervision of departmentallabour, stores, and machinery in connection with such work orsub-works. When employees borne on the temporaryestablishment are employed on work of this nature their payFshould, for the time being, be charged direct to the work.

Notes - (1) Persons who actually do the work with their hands,such as, beldars, masons, carpenters, fitters, mechanics, drivers,etc., should be engaged only when works are carried outdepartmentally, and charged to works. In cases in which it isGconsidered necessary, as a safeguard against damage to theGovernment Tools and Plant, such as road-rollers, concrete-mixture, pumping-sets, and other machinery, mechanics, drivers,etc., may be engaged by the Department or alternatively, ifengaged by the contractor must be subject to approval by thedepartment, whether the work is done departmentally or byHcontract.

(2) Mistries and work agent should, in all circumstances, whetherthey are employed on works executed departmentally or oncontract, be charged to “works”.

(3) Subject to the general principles stated in Paras 665 to 667being observed, the classes of establishment not covered by thesedefinitions may be classified as “work-charged, or temporary”,as the case may be, and the rule which prescribes that work-charged establishment must be employed upon a specific workwaived, with the previous sanction of the Government andconcurrence of the Accountant General. In such cases, theGovernment shall also determine in consultation with theAccountant General, the proportions in which the cost of suchestablishment shall be allocated between the works concerned.

668. In all the cases previous sanction of the competent authorityas laid down in Vol. I of the Handbook or in the departmentalmanuals of orders is necessary, which should specify in respectof each appointment (1) the consolidated rate of pay, (2) theperiod of sanction, and (3) the full name (as given in the estimate)of the work and the nature of the duties on which the personengaged would be employed.

669. Members of the work-charged establishment are not entitledto any pension or to leave salary or allowances except in thefollowing cases:

(a) Wound and other extraordinary pensions and gratuities arein certain cases admissible in accordance with the rules in PartVI of the Civil Service Regulations.

(b) Travelling and daily allowance may be allowed by divisionalofficers for journeys performed within the State in the interestof work on which the persons are employed on the followingconditions:

(i) The journey should be sanctioned by the divisional officeror the sub-divisional officer/ assistant engineer specificallyauthorized for the purpose by the divisional officer;

(ii) the concerned officer while sanctioning the journey shouldalso certify that the journey is actually necessary andunavoidable in the interest of the work on which the personis employed:

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1088SUPREME COURT REPORTS

A(iii) for the journeys so performed the work-charged employeemay be allowed travelling and daily allowance at the samerates and on the same conditions as are applicable to aregular government servant of equivalent status.

4. All facilities and concessions admissible to workmen of facto-Bries registered under the Factories Act, 1948, are also admissibleto the employees of the registered State Workshops and Facto-ries.”

14. Para 669 of the manual provides that except in the case asmentioned thereunder the members of work-charged establishment areCnot entitled to any pension or to leave salary or allowances.

15. In Kesar Chand v. the State of Punjab, AIR 1988 Punjaband Haryana (supra) has been rendered by Full Bench of Punjab andHaryana High Court. The Rule 3.17 (ii) of the Punjab Rules came upfor consideration before the Full Bench which reads as under:

DRule 3.17. “if an employee was holding substantively a permanentpost on the date of his retirement, his temporary or officiatingservice under the State Government, followed without interruptionby confirmation in the same or another post, shall count in Fullas qualifying service except in respect of - E(i) periods of temporary or officiating service in non-pensionable establishment;

(ii) periods of service in work-charged establishment; and

(iii) ……”

16. A Full Bench of the High Court in Kesar Chand (supra) hasFdiscussed the matter thus:

“19. In the light of the above, let us examine the validity of rule3.17(ii) of the Punjab Civil Services Rules, Vol. II. This rule saysthat the period of service in a work-charged establishment shallnot be taken into account in calculating the qualifying service.GAfter the services of a work-charged employee have beenregularised he becomes a public servant. The service is underthe Government and is paid by it. This is what was precisely statedin the Industrial Award dated June 1, 1972, between the workmenand the Chief Engineer, P.W.D. (B. & R), Establishment Branch,HPunjab, Patiala, which was published in the Government Gazette dated July 14, 1972. Even otherwise. the matter was settled bythe Punjab Government Memo No.14095-BRI (3)-72/5383 dated6th February 1973(Annexure P7) where it was stated that allthose work charged employees who had put in ten years ofservice or more as on 15th August 1972, their services wouldbe deemed to have been regularised. Once the services of awork-charged employee have been regularised, there appears tobe hardly any logic to deprive him of the pensionary benefits asare available to other public servants under Rule 3.17 of theRules.Equal protection of laws must mean the protection of equallaws for all persons similarly situated. Article 14 strikes atarbitrariness because an arbitrary provision involves negationequality. Even the temporary or officiating service under the StateGovernment has to be reckoned for determining the qualifyingservice. It looks to be illogical that the period of service spent-by an employee in a workcharged establishment before hisregularisation has not been taken into consideration fordetermining his qualifying service. The classification which issought to be made among Government servants who are eligible-for pension and those who started as workcharged employeesand their services regularised subsequently, and the others arebased on any intelligible criteria and, therefore, is not sustainableat law.After the services of a work-charged employee havebeen regularised, he is a public servant like other servant. Todeprive him of the pension is not only unjust and inequitable butis hit by the vice of arbitrariness, and for these reasons, theprovisions of sub-rule (ii) of Rule 3.17 of the Rules have to bestruck down being violative of Article 14 of the Constitution.

20. In relaxation of Rule 3.17(ii) of Rules by the respondent-authorities, the service of sixteen work-charged employees wascounted for pensionary benefits and gratuity vide Governmentof Punjab, Department of Irrigation and Power (IrrigationBranch) Memo No. 2/5/81/- IB(6)/16411 dated 7th November,1982(Annexure P2) which reads as under :-- “Sanction of the Government of Punjab is accorded inrelaxation of Rule 3.17 of Punjab Civil Services Rule, Vol. IIfor counting of previous work-charged service towardsgratuity in respect of 16 work-charged employees of NangalWorkshop mentioned in the enclosed statement subject to the A

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Conditions that no terminal benefit is/has been given to thesework-charged employees at the time of regularisation of theirservice.

Sanction of the Governor of Punjab is also accorded to thecounting of service of these 16 work-charged employeestowards pension as a special case provided no benefit hasalready been drawn by them in lieu of pensionary benefits.”

If respondent No. 1 has granted exemption from rules incertain cases, we do not find any justifiable reason forexcluding others from the grant of pension and gratuitybenefits. For this reason, too, we find Rule 3.17(ii) is badat law, as it enables the Government to discriminatebetween employees similarly situated.

21. In fairness to Mr. Bedi, the learned Addl. Advocate-General,the submission made by him may be adverted to. It wascontended that (i) a work-charged employee is engaged for aparticular purpose upon completion of which his services cometo an end, (ii) no order has been passed by the State Governmentconfirming the petitioner against the post on which his servicesare regularised and resultantly he does not fulfil the conditionsentitling a Government servant for pension, as envisaged by Rule3.12 of the Rules. The counsel also tried to justify theGovernment action by placing reliance on Rule 1.4 of the PunjabCivil Services Rules, Vol. I. It was further contended that P.W.D.(B & R), Establishment Branch is not an industry and in supportof this submission he relied on State of Punjab v. Kuldip Singh,ILR (1982) 2 Punj. and Har 544; (AIR 1983 NOC 94) (FB) andOm Parkash v. The Management of M/s. Executive Engineer,SYL Division, Kurukshetra, ILR (1984) 2 Punj. & Har. 215:(1984 Lab IC 1165) (FB) .

22. His first submission is devoid of any merit. In para 3 of thepetition, it is specifically averred that the petitioner had regularservice, without any break of a single day, right from 1951 tothe date of his superannuation in the year 1977. In thecorresponding para of the written statement, this assertion hasnot been denied but the only plea taken is that his qualifyingservice for pension and gratuity starts from 15th August 1972,i.e., the day from which he was brought on regular cadre; and

that his service in the work-charged establishment does not countfor pension under R. 3.17(ii) of the Rules. The plea that he hasbeen in continuous service has not been denied. It appears thaton the completion of one project, the petitioners were engagedin another project either with break in service or without anybreak. Every plea raised in a petition has to be specifically deniedand in the absence of a specific denial, the assertions made inthe petition will normally be deemed to have been admitted or atleast the court can proceed on the basis that it is anuncontroverted fact. Since there is no denial by the respondentsthat the petitioner has been in continuous service since 1951, itwould be presumed that he has been in continuous service tillthe date of superannuation.The second contention that no orderhas been passed by the State Government confirming thepetitioner against the post on which his services were regularised,and so on, is also without merit. The regularisation of servicesmust be against a particular post, and the petitioner will be deemedto have been made permanent on the post against which hisservices have been regularised.This precisely appears to be thepurport of the Punjab Government Memo (Annexure P7), andthe award of the Industrial Tribunal dated June 1, 1972, publishedin the Government Gazette dated July 14, 1972, referred toearlier. In the award, it was specifically held that the work-charged employees who had put in three years of continuousservice are entitled to be made permanent and to be confirmedafter having put in five years' service as demanded by theworkmen. The award may bind the workmen and themanagement of the P.W.D. (B&R) Establishment Branch.Technically speaking it may not be binding on other branches ofthe P.W.D. Once the services of a work-charged employee areregularised he will be deemed to be entitled to the benefit underR. 3.17 of the Rules.”

The services were deemed to have been regularized on thecompletion of ten years of the service as per Punjab Government Memodated 6[th] February 1983. Even otherwise, the High Court has held thatonce the employees have been regularized, there appears to be hardlyany logic to deprive them of their pensionary benefits as available tothem under the Rule 3.17 of the Punjab Civil Services Rules. It would AB

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Abe unjust and inequitable to deprive them of parity rendered under work-charged establishment.

17. It has also been held that the exemption was granted fromthe rules in certain cases. Since the rule enables the Government todiscriminate between similarly situated employees the same deservedBto be struck down. There is no reason to exclude others from the grantof pension and gratuity benefits. The aforesaid decision has not beeninterfered by this Court.

18. In Punjab State Electricity Board v. Narata Singh (2010)4 SCC 317, this Court once again considered the similar question ofCdetermination of qualifying service for grant of pensionary benefits, inparticular, the benefit of the previous service in work-charged capacitywith the State Government and whether it can be included aspensionable service. The Punjab State Electricity Board by Circulardated 25.5.1985 adopted policy decision of State Government containedin the letter dated 20.5.1982. The effect of the adoption of the policyDdecision was that temporary employees who had been retrenched fromthe services of Central/State Government and have succeeded inobtaining employment in Punjab State Electricity Board are entitled tocount prior service rendered under Central/State Government, to theextent, such service was qualified for grant of pension under the ruleEof Central/ State Government. Relying upon Kesar Chand v. the Stateof Punjab (supra) it has been held that employee holding substantivelya permanent post on the date of retirement is entitled to count in fullas qualifying service the period of service rendered in the work-chargedestablishment. Thus, the department could not have excluded the sameon the ground that it was rendered on the non-pensionableFestablishment.

19. The facts in the case of Narata Singh (supra) were thatthe Respondent No.1 was employed on a work-charged basis from1.2.1952 to 18.9.1953. From 25.9.1953 he joined as a work-chargedemployee in Bhakra Dam Project and resigned therefrom on 27.1.1962.GHe thereafter joined the Beas Dam Project on 1.2.1962 and workedat the said project till 15.4.1978 as a work-charged employee. He wasretrenched from that project w.e.f. 15.4.1978 and was paid retrenchmentcompensation by the competent authority of the project. Bhakra DamProject and Beas Dam Project are under the Department of IrrigationHand Power, State of Punjab. Thus, the services rendered under the two

projects were in fact services under the State of Punjab. The respondentNo.1 was then appointed on the work-charged basis by Punjab StateElectricity Board as Special Foremen w.e.f. 6.8.1982 to 5.1.1984. Thenon 6.1.1984, he was appointed on a regular basis. On attaining the ageof superannuation, he moved a representation for grant of pension andother retiral benefits based on taking into account the entire servicerendered by him on the work-charged basis under the StateGovernment. By order dated 25.1.1991, the pension was declined andthe only gratuity was paid to him. The stand of the Board was thatrespondent No.1 served for 7 years 11 months and 25 days. As suchhe was not entitled to grant of pension. The Division Bench of the HighCourt allowed the writ petition and directed Board to include work-charged service rendered by respondent No.1 with the State of Punjab,to determine qualifying service for grant of pension. The Court alsorelied upon circular dated 29.5.1992. As the appeal was preferred inthis Court, the case was remitted for consideration on merits of theContributory Provident Fund Scheme. Thereafter, Single Judgedismissed the writ application which was questioned in the Letters PatentAppeal filed by Narata Singh. The Division Bench after taking intoconsideration the documents which were filed directed reconsiderationof the matter and kept the appeal pending. Again, the Board rejectedthe matter by speaking order dated 16.11.2005. Thereafter, the appealwas decided by the High Court for grant of pensionary benefits on theground that he served in the work-charged capacity which was outsidethe purview of the Board and the said service was non-pensionable sofar as the State Government was concerned. Relying upon the KesarChand v. State of Punjab, the Division Bench concluded that the rulewhich excluded the counting of work-charged service of an employeewhose services were regularized subsequently was bad in law. TheCentral/State Government in consultation decided to share theproportionate pension liability on a pro-rata, service share basis. Theeffect of the policy decision of the Central Government and StateGovernment was that temporary employee, who has been retrenchedfrom the services of Central/ State Government and had securedemployment with the Punjab State Electricity Board was entitled tocount temporary service rendered by him under the Central/ StateGovernment to the extent that such service was qualified for grant ofpension under rules of Central/ State Government. This Court inNarata Singh (supra) relied upon Kesar Chand (supra) and hasobserved:

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“25. In Kesar Chand v. State of Punjab 1988 (5) SLR 27(P&H) the Full Bench held that Rule 3.17(ii) of the Punjab CivilServices Rules was violative of Article 14 of the Constitution ofIndia. The Full Bench decision was challenged before this Courtby filing a special leave petition which was dismissed. Thus, theratio laid down by the Full Bench judgment that any rule whichexcludes the counting of work-charged service of an employeewhose services have been regularised subsequently, must be heldto be bad in law was not disturbed by this Court. The distinctionmade between an employee who was in temporary or officiatingservice and who was in work-charged service as mentioned inRule 3.17(ii) of the Punjab Civil Services Rules disappeared whenthe said Rule was struck down by the Full Bench.The effectwas that an employee holding substantively a permanent post onthe date of his retirement was entitled to count in full as qualifyingservice the periods of service in work-charged establishments.

26. In view of this settled position, there is no manner of doubtthat the work-charged service rendered by Respondent 1 underthe Government of Punjab was qualified for grant of pension un-der the rules of the Government of Punjab and therefore, theBoard was not correct in rejecting the claim of the respondentfor inclusion of period of work-charged service rendered by himwith the State Government for grant of pension, on the groundthat service rendered by him in the work-charged capacity out-side PSEB and in the Departments of the State Government wasa non-pensionable service.

27. The apprehension that acceptance of the case of Respondent1 would result into conferring a status on them as that of em-ployees of the State of Punjab has no factual basis. It is truethat the State Government has power to frame rules governingser-vices of its employees under Article 309 of the Constitutionwhereas the Board has power to prescribe conditions of serviceby framing regulations under Section 79(c) of the Electricity(Supply) Act, 1948. However, governance of a particular institu-tion and issuance of instructions to fill up the gap in the fieldswhere statutory provisions do not operate, is recognised as a validmode of administration in modern times.

40. So far as this argument is concerned, it is true that the Divi-sion Bench of the High Court has expressed the above opinion in the impugned judgment. However, the reference to Rule 3.17(ii)of the Punjab Civil Services Rules as well as the Full Bench de-cision of the Punjab and Haryana High Court in Kesar Chandv. State of Punjab (supra) and the speaking order dated 16-11-2005 passed by the Board rejecting the claim of Respondent 1makes it abundantly clear that the High Court has directed theappel-lants to count the period of service rendered by Respondent1 in work-charged capacity with the State Government fordetermin-ing qualifying service for the purpose of pension.Further, Re-spondent 1 has been directed to deposit the amountof Em-ployee's Contributory Fund which he had received fromthe ap-pellants along with interest as per the directions of theBoard be-fore the pension is released to him.”

20. In Habib Khan v. the State of Uttarakhand, (Civil AppealNo.10806 of 2017), State Public Services Tribunal directed the countingof the service rendered by a work-charged employee as ‘qualifyingservice’ for the pension. Writ Petition No.24 of 2007 was filed by theState of Uttarakhand against the said order. The same was dismissedby the High Court. Against the said order Special Leave to Appeal wasfiled by the State which was also dismissed. Later on, the Full Benchof the Uttarakhand High Court took the view that the period of work-charged service cannot be counted for computation of the period of‘qualifying service’. Based on Full Bench decision, review of the orderdismissing Writ Petition No.24 of 2007 was sought which was allowedby order dated 27[th] July 2012 the same was questioned in this Court,then the SLP was dismissed as withdrawn. Based on review petition,the matter was re-heard and the High Court vide order dated 26[th] May2015 has held that the work-charged service cannot be counted forreckoning of the period of ‘qualifying service’. The decision of the FullBench of the Uttarakhand High Court passed after the grant of reviewpetition came up for consideration before this Court in Habib Khan v.the State of Uttarakhand. Following order was passed by this Courton 23.8.2017:

“6. The pari materia provision contained in Rule 3.17(ii) of thePunjab Civil Services Rules had been struck down by a FullBench decision of the Punjab and Haryana High Court in KesarChand vs. State of Punjab and ors.(supra). The challenge bythe State against the aforesaid decision of the Full Bench of the AB

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Punjab and Haryana High Court was negatived by this Court.The matter came up for consideration before this Court, onceagain, in the case of Punjab State Electricity Board and anr. Vs.Narata Singh and anr.(2010) 4 SCC 317. While dealing with thesaid question this Court in paragraph 25 of the report held thatthe Full Bench decision of the Punjab and Haryana High Courtwas perfectly justified in striking down Rule 3.17(ii) of the PunjabCivil Services Rules resulting in obliteration of the distinction madein the said Rules between ‘temporary and officiating service’ and‘work-charged service’. On the said basis, this Court took theview that the period of work-charged service should be reckonedfor purposes of computation of ‘qualifying service’ for grant ofpension.

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7. As already observed, the provisions of Rule 370 of the CivilService Regulations applicable to the State of Uttarakhand arepari materia with the provisions of Rule 3.17(ii) of the PunjabDCivil Services Rules, discussed above. If that is so, ‘we do notsee as to why the period of service rendered on work-chargedba-sis by the appellants should not be counted for purposes ofcom-putation of ‘qualifying service’ for grant of pension. Thepari ma-teria provisions of Rule 3.17 (ii) of the Punjab CivilEServices Rules having been interpreted and understood in theabove man-ner by this Court in Narata Singh(supra) we do notfind any room for taking any other view except to hold that theappellants are entitled to reckon the period of work-chargedservice for purposes of computation of ‘qualifying service’ forgrant of pen-sion. We order accordingly; allow these appeals andFset aside the impugned orders passed by the High Court.

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8. All necessary and consequential benefit in terms of the presentorder will be paid and granted by the State to the appellantsforthwith and without any delay.”

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21. This Court ordered the counting of work-charged serviceperiod towards qualifying service on the basis that pari materiaprovision contained in Rule 3.17(ii) of the Punjab Civil Services Ruleshas been struck down in Kesar Chand v. State of Punjab & Ors(supra). This Court has also relied upon Punjab State ElectricityHBoard v. Narata Singh & Anr. (supra) to grant the relief.

22. Learned Advocate General appearing for the State of UttarPradesh has referred to the decision in Jaswant Singh & Ors. v.Union of India & Ors. (1979) 4 SCC 440 to contend that work-chargedemployee is the one who is engaged temporarily and their appointmentwas made, from the very nature of their employment, till the completionof the specified work. Work-charged employees are entitled to thebenefits of the provisions contained in the Industrial Disputes Act. ThisCourt also observed that they are in a better position than temporaryservants who are liable to be thrown out of employment without anykind of compensatory benefits. The facts indicate that out of 36,000work-charged employees of the Beas Project 26,000 had acceptedretrenchment compensation. Concerning the status of work-chargedestablishment and its employees this Court has observed thus:

“42. A work-charged establishment broadly means an establish-ment of which the expenses, including the wages and allowancesof the staff, are chargeable to “works”. The pay and allowancesof employees who are borne on a work-charged establishmentare generally shown as a separate sub-head of the estimated costof the works.

43. The entire strength of labour employed for the purpose of--the Beas Project was workcharged. The workchargedemployees are engaged on a temporary basis and theirappointments are made for the execution of a specified work.From the very nature of their employment, their servicesautomatically come to an end on the completion of the worksfor the sole purpose of which they are employed.They do notget any relief under the Payment of Gratuity Act nor do theyreceive any retrenchment benefits or any benefits under theEmployees State Insurance Schemes.

44. But though the work-charged employees are denied thesebenefits, they are industrial workers and are entitled to thebenefits of the provisions contained in the Industrial Disputes Act.Their rights flow from that special enactment under whicheven contracts of employment are open to adjustment andmodification. The work-charged employees, therefore, are in abetter position than temporary servants like the other petitionerswho are liable to be thrown out of employment without any kindof com-pensatory benefits.

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1098SUPREME COURT REPORTS

A49. We would like to say that in regard to the work-charged em-ployees, it is high time that the Government framed specific rulesto govern their employment so as to dispel all doubts andconfusion.”

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23. The question involved in the aforesaid matter was relatingto the workers working in the construction work of the Beas Projectin the power sector who were retrenched. They were appointedtemporarily and under the terms and conditions of their employment,the services come to an end. This Court observed that employees couldCnot claim the quasi-permanent status. Such temporary employees werenot entitled to that benefit. Once a settlement has been reached by thework-charged employees they were bound by the settlement arrived.

24. In view of the observations made by this Court in JaswantSingh case (supra), it cannot be disputed that work-charged employeesDare appointed for a particular project and it was observed that theirstatus was better than temporary employees. Though they cannot claimquasi-permanent status. At the same time, work-charged employeescould claim their benefits under the provisions of the Industrial DisputesAct. This Court at the same time had observed that the time has comethat Government should frame specific rules concerning serviceEconditions of work-charged employees to dispel all doubts and confusion.The work-charged employees in the Jaswant Singh (supra) wereappointed for a particular project and thereafter on completion of thesame they were removed. The question involved in the present mattersis different, whether after regularization employees are entitled to counttheir service. The question involved in Jaswant Singh (supra) wasFdifferent and no such rule like Rule 3(8) of Rules of 1961 was involved.

25. Learned Advocate General has relied upon the decision inState of Rajasthan v. Kunji Raman (1997) 2 SCC 517 in which thisCourt considered the concept of equal pay for equal work. This Courtheld that the concept of equal pay for equal work did not apply to work-Gcharged employee vis-à-vis to the regular employee of PWD, theyform two separate and distinct classes. This Court held that framingof the separate rules for a work-charged employee by excluding themfrom the general rules applicable to an employee of the regularestablishment was not arbitrary or discriminatory. The rules framed byHthe State of Rajasthan came up for consideration. In that context, this

Court has pointed out the distinction in the work-charged establishmentand regular establishment. The work-charged employees were deniedProject Allowance and Leave Encashment Allowance on the groundthat Rajasthan Services Rules, 1951 and Rajasthan Service(Concessions on Project) Rules, 1962 did not apply to them. The HighCourt rejected the submission that the payment of compensatoryallowance to the employees is contrary to the principles of considerationor equal pay for equal work. It upheld the validity of rule (g), (h) and(i) for Rajasthan Service Rules, 1951 and held that work-chargedemployees are entitled to project allowance at the same rate as it wasbeing paid to employees of the regular establishment. The High Courtstruck down Rules 2 (b) and (d) of Project Rules, 1962 and Rules4(2)(4) of Project Rules, 1975 as violative of Articles 14 and 16 of theConstitution. This Court referred to the decision of the Jaswant Singh(supra) and has followed the same. This Court observed thus:

“6. A work-charged establishment as pointed out by this Courtin Jaswant Singh v. Union of India (1979) 4 SCC 440 broadlymeans an establishment of which the expenses, including thewages and allowances of the staff, are chargeable to “works”.The pay and allowances of employees who are borne on a work-charged establishment are generally shown as a separate sub-head of the estimated cost of the works. The work-chargedemployees are engaged on a temporary basis and theirappointments are made for the execution of a specified work.From the very nature of their employment, their servicesautomatically come to an end on the completion of the worksfor the sole purpose of which they are employed.Thus, a work-charged establishment is materially and qualitatively different froma regular establishment.

7. In the State of Rajasthan, the Public Works Department ismaintaining two separate establishments: (1) Regular and (2)Work-charged. The employees working in the regular establish-ment are governed by the RSR and the work-charged employeesare governed by the Work-charged Employees Service Rules.The RSR are made inapplicable, inter alia, to the work-chargedemployees. The work-charged employees fall under two catego-ries: (1) those who are working on a project and (2) those whoare not working on a project. It appears that for the workmenen-gaged in the work-charged establishment of Mahi Bajaj Sagar AB

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AProject the Government has framed separate standing orders un-der the Industrial Employment (Standing Orders) Act, 1946 andthey apply to all persons engaged in work-charged establishmentof the said Project whose terms of service are not regulated bythe RSR, Rajasthan Civil Service (Classification, Control, andAppeal) Rules and any other Rules framed under Article 309 ofBthe Constitution by the Government of Rajasthan. The standingorders provide not only for classification, recruitment, and ter-mination of service but also for wages and allowances and otherservice conditions of the persons engaged in the Mahi Project.Whereas the employees who are not working on a project getCwork-charged pay scale those who are working on a project geta special pay scale and they are also entitled to other benefitsand allowances as are applicable to all the employees coveredunder the Industrial Disputes Act, 1947, Factories Act, 1948 andIndus-trial Employment (Standing Orders) Act, 1946. Thepetitioner and other employees represented by him areDundisputably gov-erned by the said certified standing orders. Theyare not treated as full-time government employees and, therefore,are free to utilise their free time in the manner they wish. Theyare also enti-tled to grant of overtime wages. A sub-division isregarded as a unit for the purpose of establishment of the work-Echarged em-ployees. A separate seniority list of each categoryis maintained in each unit for the purpose of promotion as wellas retrench-ment. The service of a work-charged employee isordinarily not transferable from one work-charged establishmentto another work-charged establishment."

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This Court has reiterated that from the very nature of the work-charged employee their services automatically comes to an end oncompletion of the work for the sole purpose for which they areemployed. The services are not ordinarily transferable; thus, it isdifferent from a regular establishment.G

26. Learned Advocate General has also referred to the decisionin Punjab State Electricity Board v. Jagjiwan Ram (2009) 3 SCC661, wherein the question arose granting the benefit of time-boundpromotion scales/ increments which was available in case the incumbenthas rendered service in the regular establishment. This Court observedHthat regular service means services rendered after the regular

appointment and therefore does not include service rendered underad-hoc, temporary or work-charged employees. Therefore, thework-charged employees could not have been granted the benefit oftime-bound advancement of the pay scales unless they complete theprescribed period of service as regular employees. This Court againconsidered the distinction between work-charged employees and regularemployees and observed that the sources and mode of engagement ofemployees are different. Their pay and conditions of employment arealso different. The work-charged employees cannot be treated at parwith regular employees. They cannot claim regularization as a right.However, they can claim protection under the Industrial Disputes Act.The Office Order dated 23.4.1990 came for consideration which madethe “Time Bound benefit of Promotional Scale” available to a personhaving rendered regular service. It cannot be doubted that work-charged, as well as regular establishments, are different. Their modeof recruitment is also different. This Court has also observed that ifthe service of a work-charged employee is regularized by any instructionor under any scheme then he becomes a member of regularestablishment from the date of regularization. The service in the work-charged establishment cannot be clubbed with the service of regularestablishment unless a specific provision to that effect is made eitherin the statute or in the scheme of regularization. If under any regulation/rule or the scheme, the services of the work-charged employees areregularized the work-charged employees cannot claim benefit for fixationof seniority in the regular cadre. This Court in Jagjiwan Ram (supra)has observed thus:

“9. We have considered the respective submissions. Generallyspeaking, a work-charged establishment is an establishment ofwhich the expenses are chargeable to works. The pay andallowances of the employees who are engaged in a work-chargedestablishment are usually shown under a specified sub-head ofthe estimated cost of works. The work-charged employees areengaged for execution of specified work or project and theirengagement comes to an end on completion of the work orproject. The source and mode of engagement/recruitment ofwork-charged employees, their pay and conditions of employmentare altogether different from the persons appointed in the regularestablishment against sanctioned posts after following theprocedure prescribed under the relevant Act or rules and their AB

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duties and responsibilities are also substantially different thanthose of regular employees.

10. The work-charged employees can claim protection under theIndustrial Disputes Act or the rights flowing from any particularstatute but they cannot be treated on a par with the employeesof regular establishment. They can neither claim regularisationof service as of right nor can they claim pay scales and otherfinan-cial benefits on a par with regular employees. If the serviceof a work-charged employee is regularised under any statute ora scheme framed by the employer, then he becomes a memberof regular establishment from the date of regularisation. Hisservice in the work-charged establishment cannot be clubbed withser-vice in a regular establishment unless a specific provision tothat effect is made either in the relevant statute or the schemeof regularisation. In other words, if the statute or scheme underwhich service of work-charged employee is regularised does notprovide for counting of past service, the work-charged employeecannot claim benefit of such service for the purpose of fixationof seniority in the regular cadre, promotion to the higher posts,fixation of pay in the higher scales, grant of increments, etc.

13. After noticing the earlier judgment in Jaswant Singhcase, the Court held: (Kunji Raman case, SCC pp. 521-23, paras8-10)

“8. A work-charged establishment thus differs from a regularestablishment which is permanent in nature. Setting up andcontinuance of a work-charged establishment is dependentupon the Government undertaking a project or a scheme or a'work' and availability of funds for executing it. So far asemployees engaged in work-charged establishments areconcerned, not only their recruitment and service conditionsbut the nature of work and duties to be performed by themare not the same as those of the employees of the regularestablishment. A regular establishment and a work-chargedestablishment are two separate types of establishments andthe persons employed in those establishments thus form twoseparate and distinct classes. For that reason, if a separateset of rules are framed for the persons engaged in the work-charged establishment and the general rules applicable topersons working on the regular establishment are not made applicable to them, it cannot be said that they are treated inan arbitrary and discriminatory manner by the Government.It is well settled that the Government has the power to framedifferent rules for different classes of employees. We,therefore, reject the contention raised on behalf of theappellant in Civil Appeal No. 653 of 1993 that clauses (g),(h) and (i) of Rule 2 of the Rajasthan Service Rules areviolative of Articles 14 and 16 of the Constitution and upholdthe view taken by the High Court.

14. The ratio of the abovementioned judgments is that work-charged employees constitute a distinct class and they cannotbe equated with any other category or class of employees muchless regular employees and further that the work-chargedemployees are not entitled to the service benefits which areadmissible to regular employees under the relevant rules or policyframed by the employer.

20. A reading of the scheme framed by the Board makes it clearthat the benefit of time-bound promotional scales was to be givento the employees only on their completing 9/16 years’ regularservice. Likewise, the benefit of promotional increments couldbe given only on completion of 23 years' regular service. Theuse of the term “regular service” in various paragraphs of thescheme shows that service rendered by an employee afterregular appointment could only be counted for computation of 9/16/23 years’ service and the service of a temporary, ad hoc orwork-charged employee cannot be counted for extending thebenefit of time-bound promotional scales or promotional incre-ments. If the Board intended that total service rendered by theemployees irrespective of their mode of recruitment and statusshould be counted for grant of time-bound promotional scales orpromotional increments, then instead of using the expression “9/16 years’ regular service” or “23 years’ regular service, theauthority concerned would have used the expression "9/16 years'service" or "23 years' service”. However, the fact of the matteris that the scheme in its plainest term embodies the requirementof 9/16 years’ regular service or 23 years’ regular service as acon-dition for grant of time-bound promotional scales orpromotional increments as the case may be.”

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A27. It is apparent from the aforesaid discussion that it woulddepend upon the service rules or schemes whether the period of work-charged service has to be counted for ACP, in case provision has beenmade under a particular statute, rule or scheme, service rendered aswork-charged employees can be counted. It would depend upon therelevant provision of which benefit is claimed. Again, this Court hasBemphasized that by its very nature of employment work-chargedemployees have not to continue for long, employment comes to an endwith the project.

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28. The submission has been urged on behalf of the State of UttarPradesh to differentiate the case between work-charged employees andCregular employees on the ground that due procedure is not followedfor appointment of work charged employees, they do not have that muchwork pressure, they are unequal and cannot be treated equally, work-charged employees form a totally different class, their work is materiallyand qualitatively different, there cannot be any clubbing of the servicesDof the work-charged employees with the regular service and vice versa,if a work-charged employee is treated as in the regular service it willdilute the basic concept of giving incentive and reward to a permanentand responsible regular employee.

29. We are not impressed by the aforesaid submissions. TheEappointment of the work-charged employee in question had been madeon monthly salary and they were required to cross the efficiency baralso. How their services are qualitatively different from regularemployees? No material indicating qualitative difference has beenpointed out except making bald statement. The appointment was notmade for a particular project which is the basic concept of the workFcharged employees. Rather, the very concept of work-chargedemployment has been misused by offering the employment onexploitative terms for the work which is regular and perennial in nature.The work-charged employees had been subjected to transfer from oneplace to another like regular employees as apparent from documentsplaced on record. In Narain Dutt Sharma & Ors. v. State of UttarGPradesh & Ors. (CA No.______2019 @ SLP (C) No.5775 of 2018)the appellants were allowed to cross efficiency bar, after ‘8’ years ofcontinuous service, even during the period of work-charged services.Narain Dutt Sharma, the appellant, was appointed as a work-chargedemployee as Gej Mapak w.e.f 15.9.1978. Payment used to be madeHmonthly but the appointment was made in the pay scale of Rs.200-320.

Initially, he was appointed in the year 1978 on a fixed monthly salaryof Rs.205 per month. They were allowed to cross efficiency bar alsoas the benefit of pay scale was granted to them during the period theyserved as work-charged employees they served for three to fourdecades and later on services have been regularized time to time bydifferent orders. However, the services of some of the appellants infew petitions/ appeals have not been regularized even though they hadserved for several decades and ultimately reached the age ofsuperannuation.

30. In the aforesaid facts and circumstances, it was unfair onthe part of the State Government and its officials to take work fromthe employees on the work-charged basis. They ought to have resortedto an appointment on regular basis. The taking of work on the work-charged basis for long amounts to adopting the exploitative device. Lateron, though their services have been regularized. However, the periodspent by them in the work-charged establishment has not been countedtowards the qualifying service. Thus, they have not only been deprivedof their due emoluments during the period they served on less salary inwork charged establishment but have also been deprived of countingof the period for pensionary benefits as if no services had been renderedby them. The State has been benefitted by the services rendered bythem in the heydays of their life on less salary in work-chargedestablishment.

31. In view of the note appended to Rule 3(8) of the 1961 Rules,there is a provision to count service spent on work charged,contingencies or non pensionable service, in case, a person has renderedsuch service in a given between period of two temporary appointmentsin the pensionable establishment or has rendered such service in theinterregnum two periods of temporary and permanent employment. Thework-charged service can be counted as qualifying service for pensionin the aforesaid exigencies.

32. The question arises whether the imposition of rider that suchservice to be counted has to be rendered in-between two spells oftemporary or temporary and permanent service is legal and proper. Wefind that once regularization had been made on vacant posts, thoughthe employee had not served prior to that on temporary basis,considering the nature of appointment, though it was not a regularappointment it was made on monthly salary and thereafter in the payscale of work-charged establishment the efficiency bar was permitted AB

CDE

F

G

H

AB

CDE

F

G

H

Ato be crossed. It would be highly discriminatory and irrational becauseof the rider contained in Note to Rule 3(8) of 1961 Rules, not to countsuch service particularly, when it can be counted, in case such serviceis sandwiched between two temporary or in-between temporary andpermanent services. There is no rhyme or reason not to count theservice of work-charged period in case it has been rendered beforeBregularisation. In our opinion, an impermissible classification has beenmade under Rule 3(8). It would be highly unjust, impermissible andirrational to deprive such employees benefit of the qualifying service.Service of work-charged period remains the same for all the employees,once it is to be counted for one class, it has to be counted for all toCprevent discrimination. The classification cannot be done on theirrational basis and when respondents are themselves counting periodspent in such service, it would be highly discriminatory not to count theservice on the basis of flimsy classification. The rider put on that work-charged service should have preceded by temporary capacity isdiscriminatory and irrational and creates an impermissible classification.D33. As it would be unjust, illegal and impermissible to makeaforesaid classification to make the Rule 3(8) valid and nondiscriminatory, we have to read down the provisions of Rule 3(8) andhold that services rendered even prior to regularisation in the capacityof work-charged employees, contingency paid fund employees or non-Epensionable establishment shall also be counted towards the qualifyingservice even if such service is not preceded by temporary or regularappointment in a pensionable establishment.

34. In view of the note appended to Rule 3(8), which we haveread down, the provision contained in Regulation 370 of the CivilFServices Regulations has to be struck down as also the instructionscontained in Para 669 of the Financial Handbook.

35. There are some of the employees who have not beenregularized in spite of having rendered the services for 30-40 or moreyears whereas they have been superannuated. As they have workedGin the work-charged establishment, not against any particular project,their services ought to have been regularized under the Governmentinstructions and even as per the decision of this Court in Secretary,State of Karnataka & Ors. v. Uma Devi 2006 (4) SCC 1. This Courtin the said decision has laid down that in case services have beenrendered for more than ten years without the cover of the Court's order,Has one time measure, the services be regularized of such employees.

In the facts of the case, those employees who have worked for tenyears or more should have been regularized. It would not be proper toregulate them for consideration of regularisation as others have beenregularised, we direct that their services be treated as a regular one.However, it is made clear that they shall not be entitled to claiming anydues of difference in wages had they been continued in service regularlybefore attaining the age of superannuation. They shall be entitled toreceive the pension as if they have retired from the regularestablishment and the services rendered by them right from the daythey entered the work-charged establishment shall be counted asqualifying service for purpose of pension.

36. In view of reading down Rule 3(8) of the U.P. RetirementBenefits Rules, 1961, we hold that services rendered in the work-charged establishment shall be treated as qualifying service under theaforesaid rule for grant of pension. The arrears of pension shall beconfined to three years only before the date of the order. Let theadmissible benefits be paid accordingly within three months.Resultantly, the appeals filed by the employees are allowed and filedby the State are dismissed.

37. All pending interlocutory applications and miscellaneousapplications, if any, are disposed of.

Kalpana K. Tripathy

Appeals disposed of

A

B

C

D

E

F

G

H