State Govt Employee Who Worked On Deputation In Central Govt Dept Not Entitled To Pension As Per CCS Rules : Supreme Court

State Govt Employee Who Worked On Deputation In Central Govt Dept Not Entitled To Pension As Per CCS Rules : Supreme Court

Yash Mittal

14 Jan 2025 12:56 PM

The deputee does not become a regular employee in the borrowed service/department, the Court held.

Recently, the Supreme Court held that the service rendered by a state government employee on a deputation basis in a central government's department would not entitle him to pension as per Central Civil Service (Pension) Rules, 1972 (“CCS Pension Rules”).

The bench comprising Chief Justice Sanjiv Khanna and Justice Sanjay Kumar allowed the Union of India's appeal, overturning the Calcutta High Court's decision, which had upheld the Central Administrative Tribunal's (CAT) order directing that the respondent employee's pension be calculated based on the central pay scale.

The case concerns the interpretation of deputation and its impact on pension eligibility. The Respondent-Phani Bhusan Kundu was in the service of the West Bengal Government since 1968. In 1991, he was appointed as the Animal Husbandry Commissioner under the Government of India. The letter appointing him to the said post clearly stated that the appointment was by transfer on deputation basis for a period up to 31.08.1992 or till further orders, whichever is earlier.

In September 1992, he retired from service. Due to an error, the Government of India did not repatriate him to his parent department. However, his pension papers were processed by the State Government.

Later, he approached the CAT, which in 2014 directed that his pension should be fixed on the basis of the central pay scale of the post of Animal Husbandry Commissioner and such pension would be payable under the Central Civil Services (Pension) Rules instead of the the West Bengal Services (Death-cum-Retirement Benefit) Rules, 1971 (“WB Pension Rules”).

The CAT and the High Court held that by the appointment on deputation, an indefeasible right was created in favour of the employee and he had acquired a right to be absorbed.

The core legal issue was whether his service on deputation entitled him to receive a pension under the Central Civil Services (Pension) Rules, 1972 (“CCS Pension Rules”), or if his pension should solely be governed by the West Bengal Services (Death-cum-Retirement Benefit) Rules, 1971 (“WB Pension Rules”).

The Supreme Court observed :

“In our opinion, the view expressed by the CAT, and upheld by the High Court, is contrary to the law and is unsustainable. The scope and meaning of the word 'deputation' in service law was explained by this Court in State of Punjab and others v. Inder Singh and Others, means service outside the cadre or outside the parent department, that is, in another department on a temporary basis. After the expiry of the period of deputation, such an employee reverts to his parent department to occupy the same position unless, in the meanwhile, he earned a promotion in his parent department as per recruitment rules. The deputee does not become a regular employee in the borrowed service/department. The deputees lien on the post in the parent department continues. Deputation does not result in absorption in the borrowed department/service.”, the court observed.

TThe Court stated that since the Respondent employee was serving on a deputation basis in a Central Government position, and the deputation did not include provisions for absorption into the Central Government's permanent employment, his claim for pension under the CCS Pension Rules was unsustainable.

“The post of Animal Husbandry Commissioner, as per the recruitment rules, was to be filled by transfer on deputation basis. The rules do not visualize any absorption in the said post. It is, therefore, not possible to hold that respondent No. 1, Phani Bhusan Kundu, was a permanent employee and has qualifying service, to be eligible to get pension under the CCS Pension Rules.”, the court observed.

Since the Respondent employee was getting pension as per the WB Pension Rules, which proved that he served as a WB State Government's employee, the Court noted that he would not be entitled to receive the pension as per CCS Pension Rules.

Accordingly, the appeal was allowed.

Appearance:

For Petitioner(s) Mr. K. M. Nataraj, A.S.G. Mr. Kamlendra Mishra, Adv. Ms. Ruchi Kohli, Adv. Mr. Sharath Nambiar, Adv. Mr. Anuj Udupa, Adv. Mr. Digvijay Dam, Adv. Dr. N. Visakamurthy, AOR

For Respondent(s) Ms. Archana Pathak Dave, A.S.G. Mr. Sudarshan Lamba, AOR Ms. Ankita Chowdhary, Adv. Mr. Jagdish Chandra, Adv. Mr. Rishi Kapoor, Adv. Mr. Bhuvan Kapoor, Adv. Mr. Ashok Kumar Panda, Sr. Adv. Mr. Chanchal Kumar Ganguli, AOR Mr. Raja Chatterjee, Adv. Mr. Aniruddha Purushotham, Adv. Mr. Shashwat Panda, Adv

Case Title: UNION OF INDIA VERSUS PHANI BHUSAN KUNDU & ORS.

Citation : 2025 LiveLaw (SC) 65