Supreme Court rules resignation ends pension rights under CCS Rules

The top court last week clarified that under the Central Civil Service (Pension) Rules, resignation results in forfeiture of past service, which makes an employee ineligible for pensionary benefits

The Supreme Court ruled that an employee who resigns from service forfeits past service and cannot claim pension under the Central Civil Service (CCS) Pension Rules.

 

The top court last week clarified that under the CCS (Pension) Rules, resignation results in forfeiture of past service, which makes an employee ineligible for pensionary benefits.

 

The ruling came during Ashok Kumar Dabas vs Delhi Transport Corporation case, heard on December 9. The apex court said the length of service becomes irrelevant once an employee resigns.

 

“Even if the first respondent had served twenty years, under Rule 26 of the CCS Pension Rules his past service stands forfeited upon resignation. The first respondent is therefore not entitled to pensionary benefits,” the court said.

 

 

The bench added that the question of whether the employee completed twenty years of service had “no legal consequence” to the dispute, as resignation itself extinguished the claim to pension.

 

What is the case background?

 

Ashok Kumar Dabas, the deceased appellant represented through his legal heirs, was appointed as a conductor with the Delhi Transport Corporation in 1985. In 1992, the Corporation introduced a new pension scheme, which he opted for.

 

Dabas resigned from service in August 2014, citing family circumstances. The competent authority accepted his resignation in September 2014. In April 2015, he sought to withdraw his resignation, but the request was declined.

 

In September 2015, Dabas approached the Corporation seeking release of retiral benefits, including gratuity, provident fund, leave encashment and pension.

 

A month later, the Corporation informed him that since he had resigned, he was entitled only to provident fund benefits.

 

Challenging this decision, Dabas moved the Central Administrative Tribunal (CAT), which dismissed his application in September 2018. His review petition also failed. He then approached the High Court through a writ petition, which was dismissed. Aggrieved by this, the appellant moved the Supreme Court.

 

The main issue before the court

 

“The issue raised before this Court is regarding his entitlement to pension, gratuity and leave encashment,” the judgment recorded, referring to the arguments advanced by counsel for the appellant.

 

The judgment

 

Referring to the Central Civil Services (Pension) Rules, 1972, which governed the service conditions of the deceased employee, the court reiterated that resignation leads to forfeiture of past service.

 

“In the case in hand, admittedly the deceased employee resigned from service on 07.08.2014, which was accepted by the competent authority on 19.09.2014. The withdrawal of the resignation after acceptance was declined on 28.04.2015,” the court said.

 

It further said that while the rules provide pension eligibility after 30 years of qualifying service, Rule 48-A allows pension after 20 years or more. Although Dabas had completed over 20 years of service, he had not completed 30 years.

 

“The only inescapable conclusion is that on resignation by the employee, his past service stood forfeited. Hence, he will not be entitled to any pension,” the court held.

 

What the deceased employee’s family will receive

 

While denying pension and family pension, the court granted partial relief to the legal heirs.

 

“The claim of the appellant for release of gratuity cannot be denied even if he had resigned from service,” the court said, holding the family entitled to gratuity under the provisions of the Payment of Gratuity Act, 1972.

 

On leave encashment, the court recorded a fair submission from the respondent’s counsel that the amount due would be paid to the family members.

 

Summing up, the court said, “The present appeal is partly allowed. The legal heirs of the deceased employee are entitled to receive gratuity and leave encashment. As far as grant of family pension is concerned, the claim is not admissible under the 1972 Rules.”

 

It directed that the dues be paid within six weeks, along with interest at six per cent per annum from the date of resignation until payment.