REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO.    4903         OF 2009  (Arising out of SLP (Civil) No.23708 of 2005)  

Dakshin Haryana Bijli Vitran Nigam & Others .. Appellants

Versus Bachan Singh ..Respondent

WITH

CIVIL  APPEAL  Nos.__4904-4913_______OF  2009  arising  out  of  SLP (C)  Nos.5787,  7284,  8267,  8986,  10462,  12856,  12354,  17243,   16411,  16580  OF  2006,   CIVIL  APPEAL  Nos.4914-4937___OF  2009  arising  out  of  SLP  (c)  Nos.1241,  1786,  3882,  3194,  3680,  3710,  4879,  4075,  6863,  7003,  9388,  8236,  7502, 7572, 7606, 7614, 8235, 12454, 12253, 19184,  18120 19301, 7930 & 24583 OF 2007, CIVIL APPEAL  Nos.4938-4941__OF  2009  arising  out  of  SLP  (c)  Nos.14935, 17910, 27760 & 20584 of 2008 AND CIVIL  APPEAL  Nos._4942-4944___OF  2009  (Arising  out  of  SLP (c) Nos.3766, 3889 & 6240 of 2009.

* * * * *

J U D G M E N T

Dalveer Bhandari, J.

1. Leave  granted  in  all  the  special  leave  petitions.

2. These appeals  are  directed against  the  judgments  

and orders of the High Court of Punjab and Haryana at  

Chandigarh.

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3. Basic controversy involved in all these appeals is of  

similar  nature.   Therefore,  we  deem  it  appropriate  to  

recapitulate  the  facts  incorporated  in  Civil  Appeal  

No.__________ of 2009 arising out of SLP (Civil) No.23708  

of 2005 filed against the impugned judgment delivered by  

the High Court of Punjab & Haryana in Civil Writ Petition  

No.3729 of 2004 on dated 28.7.2005.  

4. The respondents herein has joined the services of  

the  appellant  as  Laboratory  Attendant  in  work-charge  

capacity  on  16.5.1963  and  continued  to  perform  his  

duties on work-charge basis on different posts until he  

was regularized as Head Mistry w.e.f. 14.10.1981.  The  

respondent  was a  member of  the  Employees Provident  

Fund  Scheme  (for  short  ‘EPF  Scheme’).   During  the  

period  he  remained  a  work-charge  employee,  the  

respondent had attained the age of superannuation and  

retired from the  service  on 28.2.2001.   The appellants  

computed  respondent’s  pensionary  benefits  by  taking  

into  account  only  the  services  rendered  by  him  on  

regular basis and he was denied benefits of the services  

rendered by him w.e.f. 16.5.1963 to 13.10.1981 on work-

charge basis.

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5. The  appellants  had  issued  instructions  dated  

6.8.1993 for the grant of benefit of work-charge service  

towards pensionary benefits.  The said letter of 6.8.1993  

is reproduced as under:-

“From :

The Additional Secretary,         Haryana State Electricity Board (HSEB),  

Panchkula

Memo No. Ch.9/Pen/G-G-43(93) Dated 6.8.93

Sub: Amendment in the Punjab CSR Vol.II-Adoption  of State Govt. Notification

The Haryana State Electricity Board in its meeting  held on 23.6.1993 has approved the adoption of Haryana  Govt.  Notification  No.1/2  (55)-88-2  FR-II  dated  4.2.92  (copy  enclosed  for  ready  reference)  with  regard  to  the  counting of service rendered by the workers in the work  charged capacity towards pensionary benefit scheme.

2. However,  most  of  the  Board’s  workcharged  employees  are  members  of  Employees  Provident  Fund  (EPF).  As such, the pensionary benefit would be subject  to the following conditions:-

i) On regularization from workcharged to regular employee,  the employee has to submit an option within a period of  3 months from the date of regularization or from the date  of issue of this circular, whichever is later as to whether  he/she  intends  to  count  the  period  of  workcharged  service rendered by him/her towards pensionary benefits  or  intends  to  continue  to  be  a  member  of  EPF.   The  option  is  required  to  be  furnished  in  writing  to  his  drawing & Disbursing Officer who will authenticate and  record its entry in the service book of the employee and  also paste the same in the service book so as to form a  permanent record for future reference.  The   Drawing &

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Disbursing Officer will also inform about his/her option  to the appointing authority immediately.

ii) The  option  once  exercised  will  be  final  and  not  to  be  allowed to  be  changed in  any circumstances.   In case  option is not given within the stipulated period of three  months,  it  will  be  presumed  that  he/she  intends  to  continue to be a member of EPF.

iii) In case, he/she opts for pensionary benefits, he/she has  to refund the entire amount of employee’s contribution  along  with  interest  thereon,  towards  their  EPF  in  lumpsum  for  crediting  to  the  Board’s  account,  Employee’s  contribution  alongwith  interest  is  to  be  deposited  with  the  Board  for  crediting  to  his/her  GPF  account.

3. Similarly, the above benefit will also be available to  the pensioners/recipients of family pension of the Board  on  the  same  terms  and  conditions  with  the  exception  that they will have to deposit the amount contributed by  the  Board  as  Employee’s  contribution  towards  EPF  alongwith  interest  thereon,  in  lumpsum.   The  pensioners/recipients of family pension will have to give  an Affidavit  to  the fact  that he/she will  not claim any  interest  on  the  arrear  of  pensionary  benefits  which  become  payable  due  to  adoption  of  the  State  Govt.  circular.  The pensioners/recipient of family pension will  submit  their  option  within  3  months  from the  date  of  issue of this circular, for availing pensionary benefits, to  the  Head of  the  office  last  attended.   The option once  exercised will be final.  In case, option is not given within  the stipulated period of 3 months, it  will  be presumed  that he/she intends to continue to be a member of EPF.

4. These instructions may please be got noted from all  the employees and acknowledge and receipt of the letter.

Sd/- Under Secretary (PW)

For Additional Secretary, HSEB, Panchkula”

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6. The  work-charge  employees  were  given  three  

months time to submit an option to the appellants.  The  

appellants  issued  another  circular  dated  9.8.1994  

allowing the said employees who could not exercise their  

option in response to the circular dated 6.8.1993 to opt  

for pensionary benefits.  Circular dated 9.8.1994 reads  

as under:-

HARYANA STATE ELECTRICITY BOARD

“From :

The Additional Secretary,         Haryana State Electricity Board (HSEB),  

Panchkula

Memo No. Ch.30/Pen/G-43(93) Dated 9.8.94

Sub:  Amendment  in  the  Punjab  CSR  Vol.II  regarding  counting  of  workcharged  service  towards  pensionary benefits – Clarification thereof.

The Haryana State Electricity Board in its meeting  held on 23.6.1993 had approved the adoption of Haryana  Govt. Notification No.1/2(55)-86-2 FR-II dated 4.2.92 and  the  same  was  circulated  vide  Board’s  Memo  No.  Ch.2/Pen/G-43(93) dated 6.8.1993.

2. After  issue  of  above  Board’s  circular  following  issues/queries  were  raised  by  the  different  field  officers/officials  effected/Workers  Unions.   The  issues/queries  were  considered  by  the  Executive  meeting  held  on  27.7.94  and  necessary  clarifications have been approved as under:-

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a)    The time limit of three  months fixed by the Board  for  submitting  the  option  expired on 5.11.93.   There  is  a  demand  for  the  extension  of  time  limit  for  exercising the option.

That  a  period  of  three  months from the date of  issue of the clarification  may  be  allowed  to  exercise  option  for  availing  the  pensionary  benefits  to  those  who  could  not  avail  this  opportunity earlier.

b)    There is an ambiguity  as  to  whether  such  employees  who  after  regularization  of  their  services continued to be the  member of EPF scheme are  covered  under  the  circular  or not.

That  the  workcharged  employees  who  were  in  service  of  the  Board as  regular  employee  on  9.1.74  (i.e.  the  deemed  date  of  adoption  of  circular)  or  got  regularization  thereafter,  could  exercise their option for  availing  the  pensionary  benefits  by  counting  of  their  work-charged  service  even  if  they  continued  to  be  the  member  of  EPF  after  issue  of  the  Board’s  instructions  dt.  6.8.93,  if  they  exercise  the  option  to  join  the  pension scheme.

c)   A point has been raised  that  what  will  be  rate  of  interest  payable  by  the  employees/  pensioners/  family pensioners to refund  the amount of EPF and the  period  for  which  the  interest is to be charged.

That  the  interest  in  such  like  cases  would  be payable from the date  of option for pensionary  benefits  to  the  date  of  actual  refund  of  the  employer’s/employeee’s  contribution  alongwith  the  interest  thereon  to  the Board.  The rate of  interst  would  be  the  same  which  is  applicable  for  GPF  subscription.

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d)    A  question  has  been  raised  as  to  whether  the  total workcharged service is  to  be  reckoned  towards  pensionary  benefits  in  terms  of  para  ‘g’  of  the  Haryana  Government  notification  dt.4.2.92  from  9.1.74.

That  the  Board  has  adopted  the  Haryana  Government Notification  dated  4.2.92  w.e.f.  9.1.74  as  provided  therein.   Therefore,  the  total  workcharged  service  of  all  those  employees  would  be  countable  towards  pensionary benefits who  were  in  service  of  the  Board  as  regular  employee  on  9.1.74  or  got  regularization  thereafter.

e)    There is demand from  the Workers Union that the  recovery  of  EPF  amount  alongwith  the  interest  should  be  made  in  instalments  instead  of  lumpsum on the pattern of  BBMB.

That  employer’s/  employee’s  contribution  alongwith  interest  thereon  may  be  refunded to the Board in  suitable  instalments  at  the  employee’s  option  within  his  remaming  period of service, subject  to  maximum  of  24  monthly instalments. In  case of those, who have  already  retired  the  employee’s  contribution  alongwith  interest  thereon will be refunded  to  the  Board  in  lumpsum.

3. These instructions may please be got noted from all  the employees and acknowledge the receipt of the  letter.

Sd/- Additional Secretary

Haryana State Electricity Board Panchkula”

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7. The  only  condition  for  opting  the  pensionary  

benefits was that the concerned employee would refund  

the  amount  of  employer’s  share  received  by  him/her  

under  the  EPF  Scheme  along  with  interest  accrued  

thereon.

8. It  was pleaded by the respondent that he had no  

knowledge about the aforesaid instructions issued by the  

appellants nor were the same got noted from him and as  

such,  he  could  not  exercise  his  option  for  grant  of  

pensionary benefits within the prescribed time-limit.

9. The  respondent  submitted  that  immediately  after  

acquiring the knowledge of the circular he exercised his  

option for being governed under the pension scheme on  

20.12.1994.   The  respondent  submitted  that  he  was  

ready to deposit  the  requisite  amount received by him  

under the EPF Scheme.  The appellants did not give any  

response  and  after  the  retirement  of  the  respondent  

calculated  his  pension  and  other  retiral  benefits  with  

effect from the date of his regularization i.e. 14.10.1981.  

The  respondent  issued  reminders  dated  2.9.2002  and  

16.4.2003,  but  did  not  receive  any  response  from the

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appellants.   Ultimately,  the  respondent  issued  a  legal  

notice to the appellants on 10.11.2003 calling upon the  

appellants to consider his pension case in the light of the  

instructions  issued  in  the  circulars  of  the  appellants  

dated 6.8.1993 and 9.8.1994.   Since  no response was  

received by the respondent, therefore, he was compelled  

to file a writ petition before the Punjab and Haryana High  

Court.

10. The appellants’  main plank of  argument was that  

the said circulars were issued twice inviting options from  

the  desirous  employees  for  being  governed  under  the  

pension scheme.  Even the said circulars were also put  

on the Notice Board and copies thereof were endorsed to  

the Secretary, Workers’ Union, but the respondent failed  

to  exercise  his  option  within  the  time  prescribed  and,  

therefore,  his  case  for  counting  work-charge  services  

towards  pensionary  benefits  has  rightly  not  been  

considered by the appellants.

11. It was submitted by the respondent before the High  

Court that he was always desirous and willing to opt for  

the pension scheme by counting the work-charge service

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and he was prepared to refund the amount of employer’s  

share  with  interest  under  the  EPF  Scheme.   The  

respondent further submitted that immediately after he  

learnt  about  the  circulars,  he  exercised  his  option  for  

pension  scheme  and  in  fact  he  has  been  consistently  

requesting the appellants to consider his case for grant of  

pension but the grievance of the respondent has not been  

redressed.  The respondent was compelled to approach  

the Punjab & Haryana High Court.

12. The Division Bench of the Punjab and Haryana High  

Court, after hearing the learned counsel for the parties at  

length,  came  to  the  definite  conclusion  that  the  

appellants had failed to produce any record showing that  

the  instructions  dated  6.8.1993  and  9.8.1994  were  

actually got noted in writing from the respondent.  The  

High Court further observed that in the absence of any  

such material, it can well be inferred that the respondent  

had  no  knowledge  about  the  options  called  by  the  

appellants vide circulars  dated 6.8.1993 and 9.8.1994.  

The  High  Court  also  observed  that  it  would  be  

unreasonable  to  deny  pensionary  benefits  to  the  

respondent  despite  the  said  circulars  issued  by  the

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appellants.  The High Court allowed the writ petition filed  

by the respondent and directed the appellants to permit  

the respondent to exercise his option in accordance with  

the  circulars  dated  6.8.1993  and  9.8.1994  within  a  

period of one month from the date of receipt of a certified  

copy  of  the  order  and  thereafter  give  him  the  

consequential  benefits  subject  to  his  fulfilling  the  

conditions  of  eligibility  for  being  governed  under  the  

pension scheme.  The appellants aggrieved by the said  

judgment of the Punjab and Haryana High Court have  

approached this court.

13. The appellants submitted that the respondent did  

not  comply  with  the  instructions  dated  6.8.1993  and  

9.8.1994 within the prescribed period and as such was  

not entitled for benefits in terms of these circulars.

14. The  High  Court  in  its  impugned  judgment  had  

categorically  observed that the appellants had failed to  

produce any record showing that the instructions dated  

6.8.1993 and 9.8.1994 were actually got noted in writing  

from the respondent.  The appellants had also failed to  

produce such material from which it can be inferred that

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the  respondent  had  any  knowledge  about  the  options  

called by the appellants vide instructions dated 6.8.1993  

and 9.8.1994.  The High Court also observed that in this  

view  of  the  matter  it  would  be  unreasonable  to  deny  

pensionary benefits to the respondent and the similarly  

placed respondents.

15. It may be pertinent to mention that the Full Bench  

of the Punjab and Haryana High Court in Kesar Chand  

v.  State  of  Punjab AIR  1988  (Punjab)  265  (FB)  after  

examining the entire case observed that once the services  

of  work-charged  employee  are  regularized,  he  will  be  

deemed to be entitled to the benefit under rule 3.17 (ii) of  

the Punjab Civil Service Rules Vol.2.  Rule 3.17 (ii) reads  

as under:-

“If  any employee was holding substantively a  permanent post on the date of his retirement,  his temporary or officiating service under the  State  Government,  followed  without  interruption  by  confirmation  in  the  same  or  another post, shall count in full as qualifying  services except in respect of :-

(i) periods of  temporary or officiating service  in non- pensionable establishment;

(ii) periods of services in work-charged establishment;  and

(iii) ………………”.

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16. The court in the said judgment held that the period  

of  service spent  by an employee on work charge basis  

prior  to  his  regularization,  should  be  taken  into  

consideration for determining his qualifying service.  This  

part is contained in para 19 of the judgment and reads  

thus:-

“19…It looks to be illogical that the period of  service  spent  by  an  employee  in  a  work- charged  establishment  before  his  regularisation  has  not  been  taken  into  consideration  for  determining  his  qualifying  service.  The classification which is  sought to  be  made  among  Government  servants  who  eligible  for  pension  and  those  who  started  work-charged  employees  and  their  services  regularised  subsequently,  and  the  others  is  based on any intelligible criteria and, before, is  not sustainable at law. After the services of a  work-charged employee have been regularised,  he is  a  public  servant  like  other servant.  To  deprive him of the pension is not only unjust  and  inequitable  is  hit  by  the  vice  of  arbitrariness, and for se reasons the provisions  of sub-rule (ii) of Rule 3.17 of the Rules have to  be struck down being violative of Article  14 of  the Constitution.”

17. Full Bench judgment of the Punjab & Haryana High  

Court in Kesar Chand’s case (supra) was carried before  

this court by way of filing a special leave petition.  This  

court dismissed the said special leave petition.

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18. This  court  has  taken  the  view  that  pension  is  

reward for long service rendered by the employee and not  

a bounty.  The Supreme Court in the case of  Subrata  

Sen & Others v.  Union of India & Others reported as  

2001(8) SCC 71 held that:-

“14….As observed in Nakara’s case, pension is  neither  a  bounty,  not  a  matter  of  grace  depending upon the sweet will of the employer,  nor an ex gratia payment.  It is a payment for  the  past  services  rendered.   It  is  a  social  welfare  measure  rendering  socio-economic  to  those  who  in  the  day-day  of  their  life  ceaselessly  toiled  for  the  employer  on  an  assurance that in their old age they would not  be left in lurch…”

19. The appellants had issued circulars dated 6.8.1993  

and  9.8.1994  for  giving  pensionary  benefits  to  the  

respondent and similarly placed employees.

20. This  court  time  and again had observed that  the  

principle  underlying  the  guarantee  of  Article  14 of  the  

Constitution is that all persons similarly placed shall be  

treated alike, both in privileges conferred and liabilities  

imposed.  Equal laws would have to be applied to all in  

the same situation without any discrimination.

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arbitrariness  because  any  action  that  is  arbitrary must necessarily involve negation of  equality.  The court made it explicit that where  an act is arbitrary it is implicit in it that it is  unequal both according to political  logic  and  constitutional  law, and is,  therefore,  violative  of Article 14.”

25. In  Ramana  Dayaram  Shetty v.  International  

Airport Authority of India & Ors.  (1979) 3 SCC 489  

again this court observed that a discriminatory action of  

the Government is liable to be struck down, unless it can  

be shown by the Government that the departure was not  

arbitrary, but was based on some valid principle which in  

itself was not irrational, unreasonable or discriminatory.

26. In view of the law as has been articulated in a large  

number of cases where this court has observed that any  

discriminatory  action  on  the  part  of  the  Government  

would be liable to be struck down.  Hence, in this case, it  

would be totally unreasonable and irrational to deny the  

respondent  the  pensionary  benefits  under  the  scheme  

particularly when the appellants have failed to produce  

any record showing that the instructions dated 6.8.1993  

and 9.8.1994 were actually got noted in writing by the  

respondent.  In the absence of any such material it can

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well be inferred that the respondent had no knowledge  

about the options called by the appellants.

27. In  our considered opinion,  the  view taken by  the  

Division  Bench  of  the  High  Court  in  the  impugned  

judgment is indeed a rational, just and fair view and no  

interference is called for.

28. These  appeals  are  devoid  of  any  merit  and  are  

accordingly  dismissed leaving  the  parties  to  bear  their  

own costs.

…...….….……………………..J.            (Dalveer Bhandari)

……..…….……………………..J.           (Dr. Mukundakam Sharma)

New Delhi; July 30, 2009