Case: P BANDOPADHYA  Vs. UNION OF INDIA

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 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 Autonomousrelevant extract of the Office Memorandum is set out hereinbelow for readye following terms and conditions will be applicable in the case of en masse transfer ofThe permanent Government servants shall have an option to retain the pensionary benefit available to them under 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/AutonomousThe Government servants who opt to be governed by the 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 thatThe permanent Government servants with less than 10 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 simple interest at 6% per annum as opening balance in their CPF account with the Public Sector Undertaking/Autonomous. 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 GovernmentThereafter, a Staff Notice dated February 21, 1990 was issued by Respondent No. 4 – VSNL to its employees, who were earlier working 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 –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. The relevant portion of Paragraph I (1) is reproduced hereinbelow for readyExercise of option in favour of retention of pensionary benefit under Central GovernmentThis option is open to every employee whose services have 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 the Pension Rules will however be conditional toPutting in a minimum of ten years of qualifying service. (9 years 9 months and above will be reckoned as 10The Appellants thereafter filed Writ Petition No. 2704 of 2005 before the Bombay High Court seeking the followingaside of Communication/Orders passed by the Respondents on March 24, 2005, May 30, 2005 and June 27, 2005;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 intoHigh 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 Sectorcase 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 judicialHigh 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].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.

Court's reasoning:
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 Centralreceive 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), ‘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,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 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 underThe 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 on the conversion of a Government Department into a Central Public Sector Undertaking/AutonomousClause (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 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 retirement ?in accordance with Central Government rules in force at thatA conjoint reading of Clauses (a) and (b) would indicate that the 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. 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 entitled to receive pensionary benefits under the Central Government rules, in the firstRule 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 completed 10 years of qualifying service. There was, therefore, no question of the Appellants availing of the option of ‘retaining? the benefits under ClauseThe Division Bench has rightly held that Clause (b) of the 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 thatFurther, 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 qualifyingIt has been rightly contended that the earlier Writ Petition 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 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 the principle of resThe Appellants were not entitled to receive pensionary benefits either under the CCS (Pension) Rules, 1972 or under Clauses (a) and (b) of the Officecase 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 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.