In a landmark judgment, the Supreme Court of India has clarified that state government employees deputed to central government roles are not entitled to pension benefits under the Central Civil Services (Pension) Rules, 1972, unless they are explicitly absorbed into the central service. The ruling came in the case of Union of India v. Phani Bhusan Kundu & Ors. (Civil Appeal No. 22850/2024), setting a significant precedent in service law.
The Bench of Chief Justice Sanjiv Khanna and Justice Sanjay Kumar overturned decisions by the Central Administrative Tribunal (CAT) and the Calcutta High Court, which had earlier ruled in favor of the respondent, Phani Bhusan Kundu.
Case Background
The respondent, Phani Bhusan Kundu, joined the State of West Bengal’s Veterinary Services in 1968 and served as Director of Veterinary Services. In 1991, he was deputed to the post of Animal Husbandry Commissioner in the Ministry of Agriculture, Government of India. Although his deputation was set to end in August 1992, he continued in the post until his retirement in September 1992 due to administrative oversight.
After retiring, Kundu approached the CAT, demanding his pension be calculated based on the central pay scale of the Animal Husbandry Commissioner’s post, governed by the CCS (Pension) Rules, 1972, instead of the state rules. The CAT ruled in his favor, directing the central government to fix his pension accordingly. The Calcutta High Court upheld this decision, prompting the Union of India to appeal to the Supreme Court.
Legal Issues
The Supreme Court addressed the following key legal issues:
1. Nature of Deputation and Its Implications:
The Court examined whether deputation creates a right to be absorbed into the borrowing department and whether an officer on deputation can claim pension benefits under the borrowing department’s rules.
2. Pension Entitlement for Deputed Employees:
The Court analyzed whether a deputed state employee, who retires while on deputation, becomes entitled to central pension benefits under the CCS (Pension) Rules or remains governed by the pension rules of the parent department.
3. Lien and Substantive Post:
A critical question was whether Kundu’s lien in his parent department, the Government of West Bengal, persisted throughout his deputation, thus making him eligible for pension only under the West Bengal Services (Death-cum-Retirement Benefit) Rules, 1971.
4. Judicial Precedents:
The Court assessed the applicability of the precedent set in Ashok Kumar Ratilal Patel v. Union of India regarding rights arising from deputation and whether it supported Kundu’s case.
Supreme Court’s Observations and Decision
The Court rejected the respondent’s claims, providing a detailed reasoning:
1. Deputation Does Not Confer Absorption Rights:
The Court emphasized that deputation is a temporary arrangement, stating:
“Deputation is a temporary mechanism and does not give rise to any vested rights in the borrowing department, including eligibility for pension under its rules.”
2. Lien in Parent Department:
The Bench clarified that Kundu retained his lien with the Government of West Bengal throughout his deputation. His substantive post and pension eligibility remained with the state.
3. No Right to Central Pension:
The Court noted that the CCS (Pension) Rules, 1972, did not apply as Kundu was never absorbed into the central service. His pension continued to be governed by the West Bengal Pension Rules.
4. Inapplicability of Precedent:
The judgment distinguished Ashok Kumar Ratilal Patel v. Union of India, noting that the case dealt with eligibility for deputation, not pension entitlement after retirement from deputation.
The Supreme Court set aside the decisions of the CAT and the Calcutta High Court. It ruled that:
– Phani Bhusan Kundu’s pension would remain calculated as per the West Bengal Services (Death-cum-Retirement Benefit) Rules, 1971.
– Deputation to the central government did not grant Kundu any rights under the CCS (Pension) Rules, 1972.
– The Union of India’s appeal was allowed, and Kundu’s application for central pension benefits was dismissed.
Legal Representation
The Union of India was represented by Additional Solicitor General K. M. Nataraj, with a team of advocates including Ruchi Kohli, Kamlendra Mishra, and others. The respondent, Phani Bhusan Kundu, was represented by senior advocate Ashok Kumar Panda and his legal team.
