Holding

An employee who obtains a No‑Objection Certificate, resigns technically from the Central Government and is appointed by the State Government is implicitly absorbed, and his prior Central Government service must be counted as qualifying service under Rule 25(ix).

Summary

The appellant, Vinod K. Bhagora, served as a Postal Assistant for the Central Government from 1983 to 1993 and then joined the Gujarat State Government as a Senior Assistant after obtaining a No‑Objection Certificate and tendering a technical resignation. He sought to have his ten years of Central Government service counted as "qualifying service" under Rule 25(ix) of the Gujarat Civil Services (Pension) Rules, 2022, for the calculation of his pension. The High Court held that the rule did not apply because the appellant was not "absorbed" by the State Government, rejecting his claim. On appeal, the Supreme Court examined the purpose of pension schemes and interpreted Rule 25(ix) broadly, concluding that the appellant was implicitly absorbed by the State Government through the NOC and technical resignation. The Court found the High Court’s interpretation narrow and erroneous, directing the State to include the Central Government service in the qualifying service and recalculate the pension. Consequently, the impugned order was set aside and the appeal was allowed, with the State ordered to pay any arrears within six weeks.

Issues considered

Whether the appellant's subsequent employment with the Gujarat State Government constitutes "absorption" such that his prior Central Government service qualifies as "qualifying service" under Rule 25(ix) of the Gujarat Civil Services (Pension) Rules, 2022.

Legislation cited

Constitution of India
Gujarat Civil Services (Pension) Rules, 2022s. Rule 25(ix)

Subjects

PensionSubsequent employmentAbsorbedPrior serviceQualifying serviceTechnical resignationTerminal benefitspensionary benefits

Judgment

[2024] 2 S.C.R. 155 : 2024 INSC 100

Vinod Kanjibhai Bhagora
v.
State of Gujarat & Anr.
(Civil Appeal No. 1571 of 2024)

02 February 2024
[Vikram Nath and Satish Chandra Sharma, JJ.]

Issue for Consideration
Whether the Appellant’s subsequent employment with the State
Government could be construed to mean that the Appellant had
been ‘absorbed’ by the State Government, such that the Appellants’
prior service with the Central Government would be considered as
a part of ‘qualifying service’ in terms of Rule 25(ix) of the Gujarat
Civil Services (Pension) Rules, 2022.

Headnotes
Gujarat Civil Services (Pension) Rules, 2022 – r.25(ix) –
Interpretation – Qualifying Service – Inclusion of the period
of service rendered to the Central Government as a part of
‘qualifying service’ under the State Government’s Pension Rules:
Held: Pension schemes floated by the State Government form a
part of delegated beneficial legislation; and ought to be interpreted
widely subject to such interpretation not running contrary to the
express provisions of the Pension Rules – State Government is
a model employer; and ought to uphold principles of fairness and
clarity –The interpretation sought to be advanced is narrow and
restrictive so as to limit the benefit of r.25(ix) only to such person(s)
who may have explicitly been absorbed by the State Government
as against persons such as the Appellant herein who had most
certainly, implicitly been absorbed by the State Government i.e.,
the Appellants’ participation in the selection process was prefaced
by an NOC from the Central Government; and subsequently was
followed by the tender of a technical resignation to the Central
Government upon securing employment with the State Government
– High Court erred in its interpretation of r.25(ix) and unfairly
deprived the Appellant from seeking inclusion of the period of
service rendered to the Central Government as a part of ‘qualifying
service’ under the Pension Rules – Respondent No.1 to consider
the service rendered by the Appellant to the Central Government
in his capacity as Postal Assistant in the Gandhinagar Postal
156 [2024] 2 S.C.R.

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Division to be considered as qualifying service and re-calculate
the terminal benefits/pensionary benefits – Impugned order set
aside. [Paras 17-20, 22]
Service Law – Pension – Grant of – raison d’etre – Discussed.
[Para 10]

Case Law Cited
LIC v. Shree Lal Meena, [2019] 5 SCR 391 : (2019) 4
SCC 479 – referred to.

List of Acts
Gujarat Civil Services (Pension) Rules, 2022; Constitution of India.

List of Keywords
Pension; Subsequent employment; Absorbed; Prior service;
Qualifying service; Technical resignation; Terminal benefits/
pensionary benefits.

Case Arising From

CIVIL APPELLATE JURISDICTION : Civil Appeal No.1571 of 2024

From the Judgment and Order dated 08.03.2018 of the High Court
of Gujarat at Ahmedabad in SCA No.22341 of 2017

Appearances for Parties
Rishabh Parikh, E. C. Agrawala, Advs. for the Appellant.
Ms. Aishwarya Bhati, A.S.G., Ms. Swati Ghildiyal, Ms. Devyani
Bhatt, Gurmeet Singh Makker, Ms. Ruchi Kohli, Ms. Archana Pathak
Dave, Ms. Suhasini Sen, S S Rebello, Shyam Gopal, Raghav
Sharma, Sughosh Subramanyam, Ms. Rekha Pandey, Advs. for the
Respondents.

Judgment / Order of the Supreme Court
Order
1. Leave granted. The decision of the High Court of Gujarat (the “High
Court”) in Special Civil Application No. 22341 of 2017 whereunder,
the High Court declined to exercise its jurisdiction under Article 226
of the Constitution of India, is assailed before us (the “Impugned
Order”).
[2024] 2 S.C.R. 157

Vinod Kanjibhai Bhagora v. State of Gujarat & Anr.

2. The Appellant was engaged by the Central Government as a Postal
Assistant in the Gandhinagar Postal Division on 12.08.1983 and
thereafter continued to serve in the aforesaid role up until 16.07.1993.
3. In the interregnum, an invitation for application(s) for recruitment to
the post of Senior Assistant in the Ministry of Health and Medical
Services, Government of Gujarat (the “State Government”) came to
be issued. Accordingly, the Appellant herein obtained a No-Objection
Certificate (“NoC”) dated 18.06.1993 from the Superintendent of
Post Office, Gandhinagar Division and thereafter participated in the
aforesaid selection process.
4. On 16.07.1993, the Appellant having been selected as Senior
Assistant in the State Government, tendered a technical resignation
in qua his employment as a Postal Assistant in the Gandhinagar
Postal Division.
5. On 18.08.1993, the Appellant joined as a Senior Assistant in the
State Government; and thereafter went on to serve the State
Government for a period extending to 23 (twenty-three) years up
until his superannuation (the “Subject Period”). Thereafter, the State
Government only paid the Appellant terminal benefits/pensionary
benefits to the extent of the Subject Period (the “Impugned Action”).
6. Aggrieved by Impugned Action of the State Government, the Appellant
made a representation before the Chief Postmaster General, Gujarat
Circle seeking the inclusion of the period of his service with the
Central Government i.e., as a Postal Assistant in the Gandhinagar
Postal Division between ‘1983 and ‘1993 to be considered in the
grant of terminal benefits / pensionary benefits as per Rule 25 of
the Gujarat Civil Services (Pension) Rules, 2022 (the “Pension
Rules”). However, vide an order dated 30.06.2014, the aforesaid
representation came to be rejected on the sole ground that the
Appellant had tendered an unconditional resignation.
7. In the aforesaid circumstances, the Appellant was constrained to
prefer a writ petition before the High Court. Vide the Impugned Order,
the High Court dismissed the aforesaid writ petition and observed inter
alia that the Appellants’ case would not attract the benefit envisaged
under Rule 25 of the Pension Rules. The operative paragraph(s) of
the decision of the High Court are reproduced hereunder:
158 [2024] 2 S.C.R.

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“6. The petitioner has claimed the pensionary benefits from
the State Government for the period he worked as Central
Government for the year 1983 to 1993. Reliance is placed
upon Rule 25 of the above Rules. However, considering
Rule 25 of the above Rules, we are of the opinion that the
same shall not be applicable to the facts and circumstances
of the case on the hand. Rule 25 of the said Rules is
with respect to the qualifying service. The employee who
has rendered his service with the Central Government is
thereafter absorbed in the State Government. Thereafter, it
was found that he has not completed the qualifying service
while working with the State Government. In that case for
the purpose of qualifying service, the service rendered by
him as a Central Government employee is required to be
counted and that too for the purpose of qualifying service.
7. Therefore, in the facts and circumstances of the case,
Rule 25 of the above Rules would not be applicable.
8. Under the circumstances, as observed hereinabove, the
petitioner has been paid the pension/pensionary/terminal
benefits of the State Government where he last worked,
considering the service rendered by him with the State
Government.”
8. Mr. Rishabh Parikh, Ld. Counsel appearing on behalf of the
Appellant has drawn the attention of the Court to Rule 25(ix) of the
Pension Rules. In the aforesaid context, he has submitted that the
Appellant has served as Postal Assistant in the Gandhinagar Postal
Division between ‘1983 and ‘1993 i.e., service under the Central
Government having a pension scheme, and thereafter served the
State Government for the Subject Period. Accordingly, it was his
principal contention that the Appellant was absorbed by the State
Government and consequently, in terms of Rule 25(ix) of the Pension
Rules, the Appellants’ terminal benefits / pensionary benefits could
not be limited to merely the Subject Period but must also include 10
(ten) years of service rendered by him to the Central Government.
9. On the other hand, Ms. Swati Ghildiyal, AOR appearing on behalf of
Respondent No. 1 i.e., the State of Gujarat has vehemently opposed
the aforesaid submission(s). The main thrust of her argument(s)
before this Court is that that the Appellant was not entitled to seek
[2024] 2 S.C.R. 159

Vinod Kanjibhai Bhagora v. State of Gujarat & Anr.

the benefit of Rule 25(ix) of the Pension Rules on account of the
Appellants’ appointment in the State Government emanating from
a fresh recruitment i.e., pursuant to an invitation for application(s)
to the post of Senior Assistant in the Ministry of Health and Medical
Services issued by the State Government.
10. As a precursor, it would be relevant to consider the raison d’etre
qua the grant of pension. Similarly, it would be equally important
to clarify that pension is earned by a government servant in lieu of
tireless service rendered by him / her (as the case may be) during the
course of their employment; and often is an important consideration
for person(s) seeking government employment. Accordingly, in our
considered opinion, the raison d’etre qua the grant of pension by
the State Government would inextricably be linked to a concentrated
effort by the State Government to enable its former employee(s) to
tide over the vagaries and vicissitudes associated with old age vide
a pension scheme.
11. In this context, we must now examine Rule 25(ix) of the Pension
Rules. For ease of reference the same is reproduced as under:
“Rule 25. Qualifying Service : Subject to the provisions of
these rules, qualifying service of a Government employee,
means and includes -
xxx xxx xxx
(ix) services rendered under Central Government/
Central Government Autonomous bodies having pension
scheme, by a Government employee who is absorbed in
Government”
12. The fulcrum of the dispute before this Court pertains to whether the
Appellants’ subsequent employment with the State Government could
be construed to mean that the Appellant had been ‘absorbed’ by the
State Government, such that the Appellants’ prior service with the
Central Government would be considered as a part of ‘qualifying
service’ in terms of Rule 25(ix) of the Pension Rules.
13. Admittedly, the Appellant served the Central Government as a
Postal Assistant in the Gandhinagar Postal Division between ‘1983
– ‘1993 i.e., for a period spanning close to a decade. Subsequently,
pursuant to an invitation of application(s) for recruitment to the post
160 [2024] 2 S.C.R.

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of Senior Assistant in the Ministry of Health and Medical Services,
Government of Gujarat, the Appellant herein after obtaining an NOC
from the Central Government, applied for and subsequently came
to be appointed to the aforesaid post. Thereafter, the Appellant
volunteered a technical resignation in order to be able to serve the
State Government.
14. On a perusal of Rule 25(ix) of the Pension Rules we note that,
qualifying service for the purpose of calculating terminal benefits /
pensionary benefits under the Pension Rules would include prior
services rendered by such an person under inter alia the Central
Government provided that (i) the employment of such person under the
Central Government encompassed an underlying pension scheme;
and (ii) such person came to be absorbed by the State Government.
15. In the present case, it is an admitted and undisputed fact that the
prior employment of the Appellant under the Central Government
contemplated an underlying pension and thus, the dispute before
us is only limited to whether the Appellant came to be ‘absorbed’
by the State Government.
16. Respondent No. 1’s stance is premised on the fact that that the
Appellant joined the services of the State Government pursuant to a
fresh recruitment i.e., pursuant to an invitation for applications issued
by the State Government; and, merely because the Appellant was a
Central Government employee in his previous avatar, he could not
be considered to have been absorbed by the State Government.
17. It is well settled that pension scheme(s) floated by the State
Government form a part of delegated beneficial legislation; and ought
to be interpreted widely subject to such interpretation not running
contrary to the express provisions of the Pension Rules1. Furthermore,
it would be relevant to underscore that the State Government is a
model employer; and ought to uphold principles of fairness and clarity.
18. In the aforesaid context, we have carefully considered the Pension
Rules, and we find that the interpretation sought to be advanced by
Ms. Ghildiyal is narrow and restrictive so as to limit the benefit of Rule
25(ix) of the Pension Rules only to such person(s) who may have
explicitly been absorbed by the State Government as against persons

1 Senior Divisional Manager, LIC v. Shree Lal Meena, [2019] 5 SCR 391 : (2019) 4 SCC 479
[2024] 2 S.C.R. 161

Vinod Kanjibhai Bhagora v. State of Gujarat & Anr.

such as the Appellant herein who has most certainly, implicitly been
absorbed by the State Government i.e., the Appellants’ participation
in the selection process was prefaced by an NOC from the Central
Government; and subsequently was followed by the tender of a
technical resignation to the Central Government upon securing
employment with the State Government. Pertinently, neither can
the aforementioned interpretation sought to be advance on behalf
of Respondent No. 1 be said to be echoed by any express provision
of the Pension Rules nor has any convincing rationale to adopt such
an interpretation, been placed before us.
19. We thus find that the High Court erred in its interpretation of Rule
25(ix) of the Pension Rules; and consequently, unfairly deprived the
Appellant from seeking inclusion of the period of service rendered
to the Central Government as a part of ‘qualifying service’ under
the Pension Rules.
20. Accordingly, we direct Respondent No. 1 to consider the service
rendered by the Appellant to the Central Government in his
capacity as Postal Assistant in the Gandhinagar Postal Division to
be considered as qualifying service; and thereafter (i) re-calculate
the terminal benefits / pensionary benefits accruing in favour of
the Appellant; and (ii) transmit the arrears (if any) of such terminal
benefits / pensionary benefits to the Appellant within 6 (six) weeks
from today i.e., 02.02.2024.
21. Upon making the aforementioned payment, Respondent No. 1 shall be
free to seek pro-rata re-imbursement / contribution from Respondent
No. 2 in respect of terminal benefits / pensionary benefits paid by
Respondent No. 1 for the period pertaining to service rendered by
the Appellant for the Central Government.
22. The Impugned Order is set aside; and the appeal stands allowed in
the aforesaid terms. Pending application(s), if any, stand disposed
of. No order as to costs.

Headnotes prepared by: Divya Pandey Result of the case:
Appeal allowed.