Summary
| Category | Data |
|---|---|
| Court | Supreme Court of India |
| Case Number | C.A. No.-014660-014660 – 2025 |
| Diary Number | 7615/2023 |
| Judge Name | HON’BLE MR. JUSTICE RAJESH BINDAL |
| Bench | HON’BLE MR. JUSTICE RAJESH BINDAL; HON’BLE MR. JUSTICE MANMOHAN |
| Precedent Value | Binding authority |
| Overrules / Affirms | Affirms that resignation leads to forfeiture of pensionary benefits under Rule 26 CCS Pension Rules |
| Type of Law | Administrative / Service Law |
| Questions of Law |
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| Ratio Decidendi |
The Court held that resignation accepted under Rule 26 of the Central Civil Services (Pension) Rules, 1972, entails forfeiture of past service and precludes entitlement to pension, distinguishing resignation from voluntary retirement per BSES Yamuna Power Ltd. However, gratuity under Section 4 of the Payment of Gratuity Act, 1972 is payable after five years of service, and leave encashment is payable on termination, absent any contractual bar. Legal heirs are entitled to gratuity and leave encashment but not family pension. |
| Judgments Relied Upon |
|
| Logic / Jurisprudence / Authorities Relied Upon by the Court |
|
| Facts as Summarised by the Court |
Deceased joined Corporation in 1985; opted new pension scheme (1992); resigned 07.08.2014 (accepted 19.09.2014); withdrawal request declined 28.04.2015; sought pension, gratuity, leave encashment 15.10.2015; respondent granted only provident fund; Tribunal (2018) and High Court (2022) dismissed claims. |
Practical Impact
| Category | Impact |
|---|---|
| Binding On | All subordinate courts and tribunals dealing with pension disputes |
| Persuasive For | High Courts |
| Follows | BSES Yamuna Power Ltd v. Ghanshyam Chand Sharma & Anr. (2020) |
What’s New / What Lawyers Should Note
- Confirms that resignation under Rule 26 CCS Pension Rules, 1972, forfeits past service and precludes pension entitlement.
- Reinforces the distinction between resignation and voluntary retirement for pension purposes.
- Clarifies that gratuity under Section 4 of the Payment of Gratuity Act, 1972 remains payable after five years of service, even on resignation.
- Confirms entitlement to leave encashment on termination in absence of any contractual prohibition.
- Affirms and applies BSES Yamuna Power Ltd as binding precedent.
Summary of Legal Reasoning
- Rule 26 CCS Pension Rules mandates forfeiture of past service on resignation; resignation accepted by authority ends service.
- Rules 36, 48, 48-A govern pension entitlement only on retirement or voluntary retirement; not triggered by resignation.
- Distinguished between resignation and voluntary retirement per BSES Yamuna Power Ltd (2020).
- Section 4 Payment of Gratuity Act, 1972 entitles employee (or heirs) to gratuity after five years, irrespective of resignation.
- No exemption notification under Section 5 of the Gratuity Act; gratuity must be paid.
- Leave encashment payable by admission of respondent’s counsel; directed to be paid.
Arguments by the Parties
Petitioner
- The resignation letter’s wording should be construed as voluntary retirement.
- Deceased had over 20 years’ service; entitled to pension under Rule 48-A CCS Pension Rules.
- Entitled to gratuity under Section 4 Payment of Gratuity Act, 1972.
- Entitled to leave encashment.
Respondent
- Rule 26 CCS Pension Rules clearly forfeits past service on resignation.
- Withdrawal of resignation was declined; service terminated.
- Pensionary benefits cannot be claimed post-resignation.
- Gratuity might not be payable under pension rules.
- Leave encashment admitted as payable.
Factual Background
The deceased was appointed as a conductor in 1985 and opted into a new pension scheme in 1992. He resigned on 07 August 2014 (accepted 19 September 2014); his request to withdraw the resignation was declined in April 2015. He applied for pension, gratuity, and leave encashment in October 2015, but the respondent granted only provident fund. The Tribunal (September 2018) and the High Court (December 2022) dismissed his claims. The appeal to the Supreme Court followed.
Statutory Analysis
Central Civil Services (Pension) Rules, 1972
- Rule 26: Resignation entails forfeiture of past service.
- Rule 36: Pension granted only on retirement per Rules 48/48-A.
- Rule 48: Retirement pension after 30 years.
- Rule 48-A: Voluntary retirement pension after 20 years (subject to notice).
Payment of Gratuity Act, 1972
- Section 4: Gratuity payable on termination after five years, including resignation or death.
- Section 5: No exemption for the Corporation.
Alert Indicators
- ✔ Precedent Followed – Affirms BSES Yamuna Power Ltd’s distinction between resignation and voluntary retirement and the forfeiture rule under CCS Pension Rules.