Holding

Employees who were absorbed into VSNL without completing ten years of qualifying service are not entitled to a Central Government pension; they are governed by Clause (c) of the Office Memorandum and receive only the provident‑fund amount.

Summary

The appellants were employees of the Overseas Communications Service (OCS) which was converted into Videsh Sanchar Nigam Limited (VSNL) in 1986. They exercised the option to be absorbed into VSNL on 2 January 1990 and also chose to retain pension benefits under Central Government rules, despite having less than ten years of qualifying service. The Department of Pension issued an Office Memorandum offering two options: retain government pension (for those with at least ten years of service) or receive a provident‑fund amount with interest (for those with less than ten years). The respondents held that the appellants fell under the latter category and were not eligible for a government pension. The Supreme Court examined the Office Memorandum in conjunction with the Central Civil Services (Pension) Rules, 1972, particularly Rules 37, 49 and 3(q), and concluded that the appellants were deemed to have retired from government service on absorption and did not meet the ten‑year qualifying service requirement. Consequently, they were not entitled to a government pension and could only receive the provident‑fund amount. The Court also applied the principle of res judicata, noting that the issue had been finally decided by the Bombay High Court. The appeal was dismissed.

Issues considered

The interpretation of the Office Memorandum clauses (a), (b) and (c) regarding pension entitlement for employees transferred to a public sector undertaking.
Whether employees with less than ten years of qualifying service who opted to retain government pension are eligible for pension under the Central Civil Services (Pension) Rules, 1972.
The applicability of Rule 37 (deemed retirement on absorption) and Rule 49 (minimum ten years qualifying service) of the CCS (Pension) Rules, 1972.
The effect of the principle of res judicata on the present petition.

Legislation cited

Central Civil Services (Pension) Rules, 1972s. Rule 37, s. Rule 3(q), s. Rule 49

Subjects

pension entitlementqualifying serviceCentral Civil Services (Pension) RulesOffice Memorandumpublic sector undertakingabsorptionres judicatagovernment employee benefits

Judgment

254 [2019]REPORTS
SUPREME COURT 4 S.C.R. 254 [2019] 4 S.C.R.

A P. BANDOPADHYA & ORS.
v.
UNION OF INDIA & ORS.
(Civil Appeal No. 3149 of 2019)
B MARCH 15, 2019
[UDAY UMESH LALIT AND INDU MALHOTRA, JJ.]
Service Law:
Pension – Entitlement to – Conversion of a Government
C Department into Central Public Sector Undertaking/Autonomous
body – En-masse transfer of the employees of the Government
Department to the Public Sector Undertaking – Department of
Pension and Pension Welfare of the Government issued Office
Memorandum specifying terms and condition governing pensionary
benefits of the transferred employees giving the employees option
D
either to retain pensionary benefits under Government Rules or be
governed by the rules of the Public Sector Undertaking – Appellants
(transferred employees) opted to be absorbed in the Public Sector
Undertaking – Further they opted to retain pensionary benefits
under the rules of Central Government – They were informed by
E the Public Sector Undertaking (employer) that they were not eligible
for Government pension but were eligible to only an amount equal
to Provident Fund Contribution (as per clause (c) in the Office
Memorandum) – Writ petition seeking direction to consider their
cases for grant of Government pension – High Court dismissing
the petition held that the appellants were not eligible to avail
F
pensionary benefits – On appeal, held: In view of r. 37 r/w. r. 49 of
CCS (Pension) Rules, appellants were not entitled to pensionary
benefits as they did not have minimum qualifying service of 10 years
to make their service pensionable with Central Government – As
per Office Memorandum also the option of retaining the pensionary
G benefits was available to only those who were in the first place
entitled to receive pension at the time of their retirement under the
Central Government Rules – Central Civil Services (Pension) Rules,
1972 – rr. 37, 3(q) and 49.

H
254
P. BANDOPADHYA & ORS. v. UNION OF INDIA & ORS. 255

Dismissing the appeal, the Court A
HELD: 1. Rule 37 of the CCS (Pension) Rules, 1972
provides that a Government servant who is absorbed in a
Corporation or Government Company is deemed to have retired
from government service on the date of his/her absorption. The
Appellants having voluntarily exercised the option to get B
absorbed in the regular service of VSNL, were deemed to have
retired from the service of the Central Government on the date
of their absorption i.e. January 2, 1990 as per Rule 37(1) of the
CCS (Pension) Rules, 1972. [Para 8.1][265-B; 266-A, B]
2. It is the admitted position that the Appellants had not C
completed 10 years of service on the date of their absorption
into VSNL, i.e. when they were deemed to have retired from the
service of the Central Government. To receive pensionary
benefits from the Government, a Government servant is required
to put in a minimum ‘qualifying service’ as defined by Rule 3(q)
of the CCS (Pension) Rules, 1972. According to Rule 3(q), D
‘qualifying service’ means the service rendered while on duty or
otherwise which shall be taken into account for the purpose of
Pensions and Gratuities admissible under the CCS (Pension)
Rules, 1972. [Para 8.2][266-B, C]
3. Rule 49(2) of the CCS (Pension) Rules, 1972 provides E
that a Government servant is entitled to receive pension on
retirement only after the completion of the qualifying service of
10 years. On the other hand, a Government servant who retires
before completing the qualifying service of 10 years is entitled to
service gratuity under Rule 49(1) of the CCS (Pension) Rules, F
1972. [Para 8.3][266-D, E]
4.A conjoint reading of the statutory rules, i.e. Rule 37 with
Rule 49 of the CCS (Pension) Rules, 1972, would make it
abundantly clear that the appellants were not entitled to
pensionary benefits since admittedly they did not have the G
minimum qualifying service of 10 years, to make their service
pensionable with the Central Government. On absorption in VSNL
on January 2, 1990 there was a severance of their service with
the Central Government. The appellants would be entitled to
the retiral benefits under VSNL. [Para 8.3][267-C, D]
H
256 SUPREME COURT REPORTS [2019] 4 S.C.R.

A 5. After exercising the option to be absorbed in VSNL, the
appellants are now estopped from seeking pensionary benefits
from the Central Government. The Office Memorandum dated
July 5, 1989 was issued by the Department of Pension and Pension
Welfare, Government of India to settle the pensionary terms and
conditions applicable in cases of en masse transfer of employees
B
on the conversion of a Government Department into a Central
Public Sector Undertaking/Autonomous Body. Clause (a) of the
Office Memorandum provided an option to Government servants
(permanent, quasi-permanent and temporary) to either retain the
pensionary benefits available to them under the Government rules
C or be governed by the rules of the Public Sector Undertaking/
Autonomous Body. Under Clause (b), Government servants who
opted to retain pensionary benefits were entitled to receive
pension at the time of their retirement “in accordance with Central
Government rules in force at that time”. A conjoint reading of
Clauses (a) and (b) of the Memorandum would indicate that the
D
option of retaining pensionary benefits was available only to those
Government servants who were, in the first place, entitled to
receive pension at the time of their retirement the option to
“retain” pensionary benefits available under the relevant
Government rules. Clauses (a) and (b) pre-suppose that the
E Government servants who opt to retain pensionary benefits,
should be entitled to receive pensionary benefits under the
Central Government rules, in the first place. [Paras 8.3 and 8.4
(a) (b)][267-D-H; 268-A, B]
6. Further, Paragraph I (1) (ii) of the document titled
F “Clarificatory Information to Facilitate Exercise of Option” clearly
stated that the eligibility to retain pensionary benefits under the
Central Government was subject to the condition of putting in a
minimum of 10 years as qualifying service. The appellants were
specifically informed of this clarification at the time of exercising
their option that their eligibility for pensionary benefits under
G the CCS (Pension) Rules, 1972 was dependant on their fulfilling
the minimum eligibility requirement of 10 years qualifying service
on the day of their retirement. [Para 8.4][268-E-G]
7. The Appellants were not entitled to receive pensionary
benefits either under the CCS (Pension) Rules, 1972 or under
H
P. BANDOPADHYA & ORS. v. UNION OF INDIA & ORS. 257

Clauses (a) and (b) of the Office Memorandum. The case of the A
appellants being Government servants prior to their absorption
in VSNL, with less than 10 years of qualifying service, would be
squarely covered by Clause (c) of the Office Memorandum. Under
Clause (c), they would be entitled to receive an amount equal to
the Provident Fund contribution for the period of their service
B
under the Government, upto the date of their permanent
absorption along with Simple Interest at 6% per annum as the
opening balance in their CPF account with the Public Sector
Undertaking/Autonomous Body. [Para 8][271-E-G]
Direct Recruit Class II Engineering Officers’ Association
v. State of Maharashtra & Ors. (1990) 2 SCC 715 : C
AIR 1990 SC 1607 : [1990] 2 SCR 900 – followed.
Union of India & Anr. v. Bashirabhai R. Khiliji (2007)
6 SCC 16 : AIR 2007 SC 1935 : [2007] 6 SCR 1060 –
relied on.
D
S.V. Vasaikar & Ors. v. Union of India & Ors. 2003 (2)
Mh.L.J. 691 : 2003 (4) Bom CR 79 – approved.
Case Law Reference
2003 (2) Mh.L.J. 691 approved Para 2.14
E
[2007] 6 SCR 1060 relied on Para 8.3
[1990] 2 SCR 900 followed Para 8.7
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 3149
of 2019.
From the Judgment and Order dated 13.01.2016 of the High Court F
of Judicature at Bombay in Writ Petition No.2704 of 2005.
Sanjay Kr. Mishra, S.K. Verma, Sravan Kumar, Advs. for the
Appellants.
Vikramjit Banerjee, ASG, Maninder Singh, Manoj Kumar, Sr. Advs., G
K.J. Presswalla, Mohan C., Hasan Murtaza, V.P. Bharathi, Ms. Divya
Anand, Kartik Anand, Parijat Kishore, Nachiketa Joshi, Vijay Prakash,
Ayush Anand, Vaibhav Chadha, Gurmeet Singh Makker, Siddhartha Sinha,
Ashutosh Kumar, Ms.Nikita Jain, Ms. Nimita Choudhary, Advs. for the
Respondents.
H
258 SUPREME COURT REPORTS [2019] 4 S.C.R.

A The Judgment of the Court was delivered by
INDU MALHOTRA, J.
Leave granted.
1. The present Civil Appeal arises out of S.L.P. (C) No. 4652 of
B 2018 wherein the impugned Judgment and Order dated January 13, 2016
passed by the Bombay High Court in Writ Petition No. 2704 of 2005 has
been challenged.
2. The facts relevant for the present Civil Appeal, are briefly set
out below:
C 2.1. The Appellants were erstwhile employees in the Overseas
Communications Service [“OCS”], a Department of the Government
of India. On April 1, 1986 the OCS was converted into a Government
Company known as the Videsh Sanchar Nigam Limited [“VSNL”].
Initially, all employees of the erstwhile OCS were transferred en masse
D to Respondent No. 4 – VSNL (now known as Tata Communications
Limited), where they worked on deputation from April 1, 1986 to January
1, 1990.
2.2. On July 5, 1989 the Department of Pension and Pension
Welfare of the Government of India issued Office Memorandum No. 4/
18/87-P & P.W. (D) [“Office Memorandum”] specifying the terms
E
and conditions governing the pensionary benefits of employees who were
transferred en masse on the conversion of a Government Department
into a Central Public Sector Undertaking or Autonomous Body.
The relevant extract of the Office Memorandum is set out
hereinbelow for ready reference:
F
“…The following terms and conditions will be applicable in
the case of en masse transfer of employees:
(a) The permanent Government servants shall have an option
to retain the pensionary benefit available to them under
G the Government rules or be governed by the rules of the
Public Sector Undertaking/Autonomous Body. This option
shall also be available to the quasi permanent and
temporary employees after they have been confirmed in
the Public Sector Undertaking/Autonomous Body.

H
P. BANDOPADHYA & ORS. v. UNION OF INDIA & ORS. 259
[INDU MALHOTRA, J.]

(b) The Government servants who opt to be governed by the A
pensionary benefits available under the Government, shall
at the time of their retirement, be entitled to pension, etc.,
in accordance with the Central Government rules in force
at that time.
(c) The permanent Government servants with less than 10 B
years’ service, quasi permanent employees and temporary
employees who opt for the rules of the Public Sector
Undertaking/Autonomous Body shall be entitled to an
amount equal to Provident Fund contribution for the period
of their service under the Government up to the date of
permanent absorption in the PSU/Autonomous Body with C
simple interest at 6% per annum as opening balance in
their CPF account with the Public Sector Undertaking/
Autonomous Body…”
(emphasis supplied)
D
2.3. In pursuance of the Office Memorandum, Notice dated
December 11, 1989 was issued by Respondent No. 4 – VSNL giving the
erstwhile employees of OCS the option to either be absorbed in the
regular service of VSNL; or, be transferred to the Surplus Staff Cell of
the Central Government for employment against possible vacancies
available in other Government offices. E

The Appellants voluntarily exercised the option to be absorbed
into the regular service of VSNL with effect from January 2, 1990.
2.4. Thereafter, a Staff Notice dated February 21, 1990 was issued
by Respondent No. 4 – VSNL to its employees, who were earlier working F
in OCS. The employees were called upon to exercise their option in
terms of Clause (a) of the Office Memorandum, i.e. either to retain the
pensionary benefits available under the Government of India at the time
of retirement as per the applicable Central Government rules in force, or
opt to be governed by the rules of Respondent No. 4 – VSNL.
G
The format in which the option was to be indicated was enclosed
with the Staff Notice, along with a document titled “Clarificatory
Information to Facilitate Exercise of Option”. As per paragraph I (1)
(ii) of the clarificatory document, the eligibility of employees who chose
to retain pensionary benefits under the Central Government was
conditional on putting in a minimum of ten years of qualifying service. H
260 SUPREME COURT REPORTS [2019] 4 S.C.R.

A The relevant portion of Paragraph I (1) is reproduced hereinbelow for
ready reference:
“I. Exercise of option in favour of retention of pensionary
benefit under Central Government rules.
(1) This option is open to every employee whose services have
B been transferred from Overseas Communications Service
to Videsh Sanchar Nigam Limited and who has been
permanently absorbed in the Videsh Sanchar Nigam Ltd.,
irrespective of service rendered in the Overseas
Communications Service. Your eligibility for benefits under
C the Pension Rules will however be conditional to :-…
… (ii) Putting in a minimum of ten years of qualifying service.
(9 years 9 months and above will be reckoned as 10 years)…”
(emphasis supplied)

D 2.5. The Appellants opted to retain pensionary benefits under the
rules of the Central Government by exercising their option in pursuance
of the Staff Notice dated February 21, 2009.
2.6. Respondent No. 4 – VSNL vide Letters dated May 22, 2003
and June 29, 2004, sought a clarification from Respondent No. 3 – Ministry
of Communications and Information Technology, Department of
E
Telecommunications [“DOT”] as to whether the Appellants – P.
Bandhopadhya, I.P. Singh and G. Palaniappan could retain the pensionary
benefits in spite of having less than 10 years of service as on January 2,
1990.
2.7. In response, the DOT vide Letter dated October 13, 2004
F
requested VSNL to settle the cases of the Appellants in accordance
with Clause (b) of the Office Memorandum.
2.8. Accordingly, by Letter dated November 30, 2004, Respondent
No. 4 – VSNL informed Respondent No. 2 – Department of Pension
and Pension Welfare, Government of India to settle the cases of the
G Appellants in accordance with Clause (b) of the Office Memorandum.
2.9. In supersession of the Letter dated October 13, 2004, the
Department of Pension and Pension Welfare, Government of India, vide
Letter dated March 24, 2005 informed Respondent No. 4 – VSNL that
the payment of Pension to the Appellants would be settled in terms of
H
P. BANDOPADHYA & ORS. v. UNION OF INDIA & ORS. 261
[INDU MALHOTRA, J.]

the Office Memorandum. This was re-confirmed by Respondent No. 3 A
– DOT vide Letter dated May 30, 2005.
2.10. Accordingly, Respondent No. 2 – Department of Pension
and Pension Welfare, Government of India informed the Appellants that
their pension would be settled in terms of the Office Memorandum.
2.11. On June 27, 2005 the Appellants were informed by B
Respondent No. 4 – VSNL that they would not be eligible to receive
Government Pension. They would, however, be eligible to receive benefits
under Clause (c) of the Office Memorandum i.e. an amount equal to the
Provident Fund contribution for the period of their service under the
Government up to the date of permanent absorption in the Public Sector C
Undertaking/Autonomous Body with 6% Simple Interest as opening
balance in their CPF account with the Public Sector Undertaking/
Autonomous Body.
2.12. Aggrieved by this decision, the Appellants made a
representation before the Respondents seeking for a declaration that D
their cases be governed by Clause (b), and not Clause (c) of the Office
Memorandum.
2.13. The Appellants thereafter filed Writ Petition No. 2704 of
2005 before the Bombay High Court seeking the following prayers:
• setting aside of Communication/Orders passed by the E
Respondents on March 24, 2005, May 30, 2005 and June 27,
2005;
• directions to treat the cases of the Appellants as being governed
by Clause (b), and not Clause (c) of the Office Memorandum.
F
In effect, the Appellants were seeking directions that their cases
be considered eligible for grant of pension by the Government of India.
2.14. A Division Bench of the Bombay High Court dismissed Writ
Petition No. 2704 of 2005 on April 26, 2006 after holding that the case of
the Appellants was covered by an earlier decision of a Division Bench in
G
S.V. Vasaikar & Ors. v. Union of India & Ors. [2003 (2) Mh.L.J. 691
: 2003 (4) Bom CR 79]. The Judgment dated April 26, 2006 passed by
the Division Bench was challenged by the Appellants before this Court
by way of S.L.P. (C) No. 15862 of 2006, which was later renumbered
as Civil Appeal No. 3059 of 2007. This Court vide Order dated July 14,
2011 set aside the Judgment dated April 26, 2006 passed by the Division H
262 SUPREME COURT REPORTS [2019] 4 S.C.R.

A Bench of the Bombay High Court in view of the submission by the
Appellants that the decision in S.V. Vasaikar & Ors. v. Union of India
& Ors. [2003 (2) Mh.L.J. 691 : 2003 (4) Bom CR 79] was not applicable
to the facts of their case. The matter was remanded to the High Court
for fresh consideration on merits.
B 2.15. After remand, the Bombay High Court re-heard the matter,
and passed a detailed judgment dismissing Writ Petition No. 2704 of
2005, and held that the Appellants were not eligible to avail pensionary
benefits under the Government of India, since they had served for less
than 10 years on the date of their absorption into VSNL.
C The High Court held that on a cumulative reading of Clauses (a),
(b), and (c) of the Office Memorandum makes it clear that only
permanent Government servants who have served for more than 10
years would have the option of getting pensionary benefits after their
absorption in Public Sector Undertakings.
D The case of the Appellants would be governed by Clause (c) of
the Office Memorandum which clearly carved out the category of
employees who had not completed 10 years of service. It was held that
a new category which is either contrary to Clause (c), or renders the
import of Clauses (a) and (b) nugatory, cannot be created by way of
judicial interpretation.
E
The High Court held that the matter was squarely covered by the
earlier decision of a Division Bench of the Bombay High Court in S.V.
Vasaikar & Ors. v. Union of India & Ors. [2003 (2) Mh. L.J. 691 :
2003 (4) Bom CR 79].

F 3. Aggrieved by the Judgment and Order dated January 13, 2016
passed by the Division Bench, the Appellants filed the present Special
Leave Petition. Applications for Impleadment have been filed by 48
persons who claim to be similarly situated as the Appellants.
4. Mr. Sanjay Kumar Mishra, Advocate appeared on behalf of
the Appellants, and sought the setting aside of the impugned Judgment
G
and Order dated January 13, 2016 passed by the Division Bench.
Mr. Vikramjit Banerjee, learned Additional Solicitor General,
appeared on behalf of Respondent Nos. 1 – 3, and Mr. Maninder Singh,
learned Senior Advocate, appeared on behalf of Respondent No. 4 –
VSNL.
H
P. BANDOPADHYA & ORS. v. UNION OF INDIA & ORS. 263
[INDU MALHOTRA, J.]

5. We have perused the record with the able assistance of the A
counsel for the parties. The issue which arises for our consideration in
the present Civil Appeal is whether the Bombay High Court was justified
in holding that the case of the Appellants was covered by the earlier
decision in S.V. Vasaikar & Ors. v. Union of India & Ors. [2003 (2)
Mh. L.J. 691 : 2003 (4) Bom CR 79], and whether they are entitled to
B
receive pensionary benefits under the Central Government.
6. SUBMISSIONS OF PETITIONERS
6.1. Mr. Sanjay Kumar Mishra, Advocate, submitted that the
Division Bench of the Bombay High Court had committed an error by
denying pensionary benefits to the Appellants. C
6.2. It was submitted that Clause (b) of the Office Memorandum
would govern the case of the Appellants, since they had opted to avail
the pensionary benefits available under the Central Government at the
time of their retirement under Clause (a) of the Office Memorandum.
6.3. It was further submitted that the Office Memorandum should D
be interpreted in isolation on the basis of its plain text, and the Form
attached with the Staff Notice dated February 21, 1990 should not
condition the said interpretation.
6.4. The Division Bench had erroneously interpreted the Office
Memorandum, since Clause (a) is the controlling provision, and Clause E
(c) in no way dilutes what is provided by Clause (a).
The Appellants challenged the interpretation of the Office
Memorandum given by a co-ordinate bench in S.V. Vasaikar & Ors. v.
Union of India & Ors. [2003 (2) Mh. L.J. 691 : 2003 (4) Bom CR 79].
F
According to Mr. Mishra, Clauses (c) and (d) of the Office
Memorandum provides only the mode of payment of retiral benefits
with respect to two different categories of employees – viz. employees
with less than 10 years of qualifying service, and employees with more
than 10 years of qualifying service.
7. SUBMISSIONS OF RESPONDENTS G

7.1. The counsel for the Respondents inter alia submitted that
the issue in the present case was squarely covered by the earlier judgment
of the Bombay High Court in S.V. Vasaikar & Ors. v. Union of India
& Ors. [2003 (2) Mh. L.J. 691 : 2003 (4) Bom CR 79]. The Appellants
H
264 SUPREME COURT REPORTS [2019] 4 S.C.R.

A through their Federation had appeared in this case, and had not challenged
this judgment before this Court. As a consequence, this judgment attained
finality. It was therefore not open to the Appellants to re-litigate the
same issue in the present Writ Petition. The Division Bench rightly
followed the said decision while dismissing Writ Petition No. 2704 of
2005 by way of the impugned Judgment and Order dated January 13,
B
2016.
7.2. It was submitted on behalf of VSNL that the Office
Memorandum categorises employees into two classes – first, those who
have completed 10 years of qualifying service; and second, those who
do not have 10 years of qualifying service. Under the Office
C Memorandum, while the first class of employees is entitled to pension
under the Government of India, the second class is entitled to a certain
sum of Provident Fund contribution.
7.3. The Appellants admittedly had less than 10 years of qualifying
service. They had voluntarily exercised their option of getting absorbed
D in the regular service of VSNL. As a consequence, this resulted in the
severance of their previous service with the Central Government, and
they were deemed to have retired from Government service on January
2, 1990 i.e. the date of their absorption with VSNL in accordance with
Rule 37(1) of the Central Civil Services (Pension) Rules, 1972 [“CCS
E (Pension) Rules, 1972].
The Appellants having taken a conscious decision to opt for
absorption in VSNL, knowing fully well that they had not completed 10
years of qualifying service with the Central Government, were not entitled
to receive pensionary benefits as per Rule 49 of the CCS (Pension)
F Rules, 1972.
7.4. It was submitted that the Office Memorandum was virtually
in conformity with Rule 49 r.w. Rule 37 of the CCS (Pension) Rules,
1972. In any case, the Office Memorandum cannot be interpreted in
isolation, and has to be construed in consonance with the CCS (Pension)
G Rules, 1972.
The requirement of having completed a minimum qualifying service
of 10 years for entitlement to pensionary benefits under Rule 49 of the
CCS (Service) Rules, 1972 would apply to Clause (a) of the Office
Memorandum.
H
P. BANDOPADHYA & ORS. v. UNION OF INDIA & ORS. 265
[INDU MALHOTRA, J.]

The Appellants had admittedly less than the minimum qualifying A
service of 10 years, and were deemed to have retired from Government
service, and were not entitled to pensionary benefits under the Central
Government. On absorption with VSNL, they would not be entitled to
pension.
8. DISCUSSION AND ANALYSIS B
8.1. Rule 37 of the CCS (Pension) Rules, 1972 provides that a
Government servant who is absorbed in a Corporation or Government
Company is deemed to have retired from government service on the
date of his/her absorption.
The relevant extract of Rule 37 of the CCS (Pension) Rules, 1972 C
is reproduced hereinbelow:
“37. Pension on absorption in or under a corporation, company
or body
(1) A Government servant who has been permitted to be
absorbed in a service or post in or under a Corporation
D
or Company wholly or substantially owned or controlled
by the Central Government or a State Government or in or
under a Body controlled or financed by the Central
Government or a State Government, shall be deemed to
have retired from service from the date of such absorption
and subject to sub-rule (3) he shall be eligible to receive E
retirement benefits if any, from such date as may be
determined, in accordance with the orders of the Central
Government applicable to him.
(2) …
(3) Where there is pension scheme in a body controlled or F
financed by the Central Government in which a Government
servant is absorbed, he shall be entitled to exercise option
either to count the service rendered under the Central
Government in that body for pension or to receive pro rata
retirement benefits for the service rendered under the
G
Central Government in accordance with the orders issued
by the Central Government.
EXPLANATION.– Body means Autonomous Body or Statutory
Body.”
(emphasis supplied)
H
266 SUPREME COURT REPORTS [2019] 4 S.C.R.

A The Appellants having voluntarily exercised the option to get
absorbed in the regular service of VSNL, were deemed to have retired
from the service of the Central Government on the date of their absorption
i.e. January 2, 1990 as per Rule 37(1) of the CCS (Pension) Rules,
1972.
B 8.2. It is the admitted position that the Appellants had not completed
10 years of service on the date of their absorption into VSNL, i.e. when
they were deemed to have retired from the service of the Central
Government.
To receive pensionary benefits from the Government, a
Government servant is required to put in a minimum ‘qualifying service’
C
as defined by Rule 3(q) of the CCS (Pension) Rules, 1972. According to
Rule 3(q), ‘qualifying service’ means the service rendered while on duty
or otherwise which shall be taken into account for the purpose of Pensions
and Gratuities admissible under the CCS (Pension) Rules, 1972.
8.3. Rule 49(2) of the CCS (Pension) Rules, 1972 provides that a
D Government servant is entitled to receive pension on retirement only
after the completion of the qualifying service of 10 years.1 On the other
hand, a Government servant who retires before completing the qualifying
service of 10 years is entitled to service gratuity under Rule 49(1) of the
CCS (Pension) Rules, 1972.
E The relevant extract of Rule 49 of the CCS (Pension) Rules, 1972
is reproduced hereunder for ready reference:
“49. Amount of Pension
(1) In the case of a Government servant retiring in accordance
with the provisions of these rules before completing
F qualifying service of ten years, the amount of service
gratuity shall be calculated at the rate of half month’s
emoluments for every completed six monthly period of
qualifying service.
(2) (a) In the case of a Government servant retiring in
G accordance with the provisions of these rules after
completing qualifying service of not less than thirty-three
years, the amount of pension shall be calculated at fifty
per cent of average emoluments, subject to a maximum of
four thousand and five hundred rupees per mensem.;
1
Union of India & Anr. v. Bashirbhai R. Khiliji, (2007) 6 SCC 16 : AIR 2007 SC 1935.
H
P. BANDOPADHYA & ORS. v. UNION OF INDIA & ORS. 267
[INDU MALHOTRA, J.]

(b) In the case of a Government servant retiring in A
accordance with the provisions of these rules before
completing qualifying service of thirty-three years, but
after completing qualifying service of ten years, the amount
of pension admissible under Clause (a) and in no case the
amount of pension shall be less than Rupees three hundred
B
and seventy-five per mensem;…”
(emphasis supplied)
A conjoint reading of the statutory rules, i.e. Rule 37 with Rule 49
of the CCS (Pension) Rules, 1972, would make it abundantly clear that
the Appellants were not entitled to pensionary benefits since admittedly C
they did not have the minimum qualifying service of 10 years, to make
their service pensionable with the Central Government. On absorption
in VSNL on January 2, 1990 there was a severance of their service with
the Central Government. The Appellants would be entitled to the retiral
benefits under VSNL. D
After exercising the option to be absorbed in VSNL, the Appellants
are now estopped from seeking pensionary benefits from the Central
Government.
8.4. The Office Memorandum dated July 5, 1989 was issued by
the Department of Pension and Pension Welfare, Government of India E
to settle the pensionary terms and conditions applicable in cases of en
masse transfer of employees on the conversion of a Government
Department into a Central Public Sector Undertaking/Autonomous Body.
(a) Clause (a) of the Office Memorandum provided an option to
Government servants (permanent, quasi-permanent and F
temporary) to either retain the pensionary benefits available to
them under the Government rules or be governed by the rules
of the Public Sector Undertaking/Autonomous Body. Under
Clause (b), Government servants who opt to retain pensionary
benefits were entitled to receive pension at the time of their G
retirement “in accordance with Central Government rules
in force at that time”.
(b) A conjoint reading of Clauses (a) and (b) would indicate that
the option of retaining pensionary benefits was available only
H
268 SUPREME COURT REPORTS [2019] 4 S.C.R.

A to those Government servants who were, in the first place,
entitled to receive pension at the time of their retirement. This
is evident from Clause (a) which provides the option to “retain”
pensionary benefits available under the relevant Government
rules. Clauses (a) and (b) pre-suppose that the Government
servants who opt to retain pensionary benefits, should be
B
entitled to receive pensionary benefits under the Central
Government rules, in the first place.
(c) Rule 37 read with Rule 49 of the CCS (Pension) Rules, 1972
indicates that the Appellants were not entitled to receive Pension
under the CCS (Pension) Rules, 1972, since they had not
C
completed 10 years of qualifying service. There was, therefore,
no question of the Appellants availing of the option of ‘retaining’
the benefits under Clause (a).
(d) The Division Bench has rightly held that Clause (b) of the
D Office Memorandum cannot be read in isolation, and is required
to be read in conjunction with Clause (a). The entitlement to
Pension under Clause (b) is qualified by the phrase “in
accordance with the Central Government rules in force at
that time”.

E (e) Further, Paragraph I (1) (ii) of the document titled
“Clarificatory Information to Facilitate Exercise of Option”
clearly stated that the eligibility to retain pensionary benefits
under the Central Government was subject to the condition of
putting in a minimum of 10 years as qualifying service.

F The Appellants were specifically informed of this clarification at
the time of exercising their option that their eligibility for pensionary
benefits under the CCS (Pension) Rules, 1972 was dependant on their
fulfilling the minimum eligibility requirement of 10 years qualifying service
on the day their retirement.

G 8.5. We find great force in the submissions made by Mr. Maninder
Singh, Senior Advocate appearing for VSNL, and the learned Additional
Solicitor General, that the case is squarely covered by the earlier decision
of a Division Bench of the Bombay High Court in S.V. Vasaikar & Ors.
v. Union of India & Ors. [2003 (2) Mh. L.J. 691 : 2003 (4) Bom CR
79].
H
P. BANDOPADHYA & ORS. v. UNION OF INDIA & ORS. 269
[INDU MALHOTRA, J.]

8.6. It has been rightly contended that the earlier Writ Petition A
No. 5374 of 2002 was filed in a representative capacity. Petitioner No.
3 in the said Writ Petition was the Federation of the VSNL Employees
Union, a collective body of VSNL employees. The Federation was
espousing the collective interest of the Appellants, and other similarly
situated persons before the Division Bench. The prayers in Writ Petition
B
No. 5374 of 2002, was recorded by the High Court in the following
words:
“3. In the second petition, i.e., Writ Petition No. 5374 of 2002,
a prayer is made for declaring that the action of the
respondents in not giving the petitioners and similarly situated
C
employees, who had not completed ten years of service with
the Government of India, the right to exercise option for
retaining Government pensionary benefits on their absorption
with VSNL is arbitrary, discriminatory and violative of Articles
14 and 16 of the Constitution. It was, therefore, prayed that
appropriate direction be issued to the Government of India D
that the Petitioners and similarly situated employees, who had
not completed ten years of service on their date of absorption
in VSNL, are entitled to exercise option for retaining
Government pensionary benefits by counting their service in
Government of India along with their service with VSNL for
E
such benefits.”
(emphasis supplied)
The Division Bench dismissed the Writ Petitions, and held as
follows:
F
“26. Regarding the contention that employees, who had not
completed ten years, were not allowed to exercise the option
with regard to pensionary benefits, it may be stated that even
when they were in the Government service, when VSNL was a
Government Company, they were not entitled to such benefits.
Reading the memorandum also, it becomes abundantly clear G
that the persons, who had not completed ten years of service
with the Government, were not entitled to pensionary benefits.
The option, which was allowed by the Government, and to be
exercised by the employees, was in respect of those employees
H
270 SUPREME COURT REPORTS [2019] 4 S.C.R.

A who had completed ten years or more of service and quasi-
permanent employees and temporary employees, who would
be entitled to such benefits after they would be confirmed in
the Public Sector or Autonomous Bodies. Since the petitioners
and similarly situated persons, who had not completed ten
years of service, were not entitled to such benefits even under
B
the Government, they cannot make grievance for pensionary
benefits.”
(emphasis supplied)
The afore-said findings of the Division Bench squarely cover the
C present case of the Appellants.
8.7. The decision in S.V. Vasaikar & Ors. v. Union of India &
Ors. [2003 (2) Mh. L.J. 691 : 2003 (4) Bom CR 79] was not challenged
before the Supreme Court, and has since attained finality. Therefore,
the relief sought by the Appellants before the High Court was barred by
D the principle of res judicata.
Reference can be made to the decision of the Constitution Bench
in Direct Recruit Class II Engineering Officers’ Association v. State
of Maharashtra & Ors.2 wherein Sharma, J., on behalf of the five-
judge bench, held:
E
“35…It is well established that the principles of res judicata
are applicable to writ petitions. The relief prayed for on behalf
of the petitioner in the present case is the same as he would
have, in the event of his success, obtained in the earlier writ
petition before the High Court. The petitioner in reply
F contended that since the special leave petition before this
Court was dismissed in limine without giving any reason, the
order cannot be relied upon for a plea of res judicata. The
answer is that it is not the order of this Court dismissing the
special leave petition which is being relied upon; the plea of
G res judicata has been pressed on the basis of the High Court’s
judgment which became final after the dismissal of the special
leave petition. In similar situation a Constitution Bench of
this Court in Daryao v. State of UP3 held that where the High
2
(1990) 2 SCC 715 : AIR 1990 SC 1607.
3
H (1962) 1 SCR 574 : AIR 1961 SC 1457.
P. BANDOPADHYA & ORS. v. UNION OF INDIA & ORS. 271
[INDU MALHOTRA, J.]

Court dismisses a writ petition under Article 226 of the A
Constitution after hearing the matter on the merits, a
subsequent petition in the Supreme Court under Article 32 on
the same facts and for the same reliefs filed by the same parties
will be barred by the general principle of res judicata. The
binding character of judgments of courts of competent
B
jurisdiction is in essence a part of the rule of law on which
the administration of justice, so much emphasised by the
Constitution, is founded and a judgment of the High Court
under Article 226 passed after a hearing on the merits must
bind the parties till set aside in appeal as provided by the
Constitution and cannot be permitted to be circumvented by C
a petition under Article 32…”

(emphasis supplied)

Albeit the decision of the Constitution Bench was in the context
of a Writ Petition filed under Article 32, it would apply with greater force D
to bar a Writ Petition filed under Article 226, like the one filed by the
present Appellants, by the operation of the principle of res judicata.

8.8. The Appellants were not entitled to receive pensionary benefits
either under the CCS (Pension) Rules, 1972 or under Clauses (a) and
E
(b) of the Office Memorandum.

The case of the Appellants being Government servants prior to
their absorption in VSNL, with less than 10 years of qualifying service,
would be squarely covered by Clause (c) of the Office Memorandum.
Under Clause (c), they would be entitled to receive an amount equal to F
the Provident Fund contribution for the period of their service under the
Government, upto the date of their permanent absorption along with
Simple Interest at 6% per annum as the opening balance in their CPF
account with the Public Sector Undertaking/Autonomous Body.

9. In view of the aforesaid findings, the present Civil Appeal is G
dismissed. The impugned Judgment and Order dated January 13, 2016
passed by the Bombay High Court in Writ Petition No. 2704 of 2005 is
affirmed.

H
272 SUPREME COURT REPORTS [2019] 4 S.C.R.

A 10. The Applications for Impleadment filed in the Appeal are
disposed of in terms of the present judgment. Any other pending I.A.s
are disposed of.
Ordered accordingly.

B
Kalpana K. Tripathy Appeal dismissed.

C

D

E

F

G

H