* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ LPA 266/2009
% Reserved on: February 18th, 2010
Decided on: May 28th , 2010
R. N. DHAWAN ..... Appellant
Through: Mr. Rakesh Kumar Singh, Advocate.
versus
D.D.A AND ANR. ..... Respondents
Through: Mr. Arun Birbal, Advocate for R-1.
Dr. Ashwani Bhardwaj and
Mr. Jitender Chaudhary, Advocate for
R-2.
Coram:
HON'BLE MR. JUSTICE MADAN B.LOKUR
HON'BLE MS. JUSTICE MUKTA GUPTA
1. Whether the Reporters of local papers may
be allowed to see the judgment? Not necessary.
2. To be referred to Reporter or not? Not necessary.
3. Whether the judgment should be reported
in the Digest? Not necessary.
MUKTA GUPTA, J.
1. The Appellant was appointed as a Tracer on 12th November, 1956 by
the Indian Railways and after confirmation was promoted as Junior
Draftsman-B with effect from 20th February, 1960. On 1st June, 1970 he was
LPA No. 266/2009 Page 1 of 25
duly confirmed as Draftsman-A. The Respondent No. 1/Delhi Development
Authority (DDA) had called for applications for eligible candidates to fill
vacancies for the post of Junior Engineer. Pursuant to an application filed
through proper channel the Appellant was selected and on 14th July, 1981 was
relieved from the Indian Railways. Before joining the DDA the Appellant had
furnished an undertaking that he would not claim any benefit whatsoever
regarding seniority, promotion or pay fixation on the basis of his past services
rendered in other departments from DDA. On 15th July, 1981 on joining the
DDA the Appellant was placed under probation. However, his lien was
retained in the Indian Railways for a period of two years. Thereafter, he
applied for voluntary retirement from the Railways which was accepted by the
Ministry of Railways. On a query from the Ministry of Railways as to
whether the Appellant has completed his probation successfully the DDA vide
its letter dated 7th November, 1984 confirmed that the Appellant had acquired
quasi permanent status after completion of probation with effect from 15 th
July, 1984.
2. The Appellant filed a writ petition being WP(C) No.1023/1990 inter
alia praying for a declaration as a permanent employee of the DDA, fixation
of basic pay at Rs.660/- per month with effect from 15th July, 1981 i.e. when
LPA No. 266/2009 Page 2 of 25
he joined DDA with all consequential allowances, pensionary benefits on the
basis of past service in Ministry of Railways.
3. During the pendency of the said writ petition on the Appellant‟s
representation the DDA vide its order dated 23rd October, 1991 fixed the pay
of the Appellant at Rs.660/- per month in the scale of Rs.425-700/- (pre-
revised) with effect from 15th July, 1981 which he was drawing in the
Ministry of Railways before joining DDA. However, this order was
withdrawn on 27th September, 1994. In the meantime, the Appellant attained
the age of superannuation on 30th September, 1994. Vide order dated 24th
April, 1995 this Court disposed of the writ petition of the Appellant by setting
aside the order dated 27th September, 1994 of the Respondent-DDA
superseding its earlier order dated 23rd October, 1991 and allowed the writ
petition by directing the Respondents to grant all consequential reliefs such as
seniority, promotion and superannuation benefits available in accordance with
law. The DDA challenged the order dated 24th April, 1995 passed by the
learned Single Judge of this Court disposing of the writ petition of the
Appellant. In view of the fact that the issues had not been decided on merits,
the Division Bench in LPA No. 443/1995 remanded the matter back to the
learned Single Judge for hearing on 12th January 1999 directing to consider
the remaining issues with regard to the entitlement of the Appellant vis-à-vis
LPA No. 266/2009 Page 3 of 25
service benefits under the DDA. The Appellant thereafter filed number of
applications and also amended the writ petition.
4. By way of amendment the Appellant sought directions to the DDA to
fix the Appellant‟s seniority immediately or next below the permanent
confirmed employees of the DDA drawing the same pay scale as on 15 th July,
1981 or in the alternative sought seniority in the parent department in addition
to the existing claims. Thus principally the two issues raised by the Appellant
before the learned Single Judge were: Firstly, assignment of proper seniority
and promotion to the Appellant and Secondly, reckoning of the entire length
of service before 15th July, 1981 in the Railways for the purpose of release of
pension and pensionary benefits by the DDA. The learned Single Judge of this
Court after hearing detailed arguments with regard to the first issue held that
the same cannot be acceded to as the persons likely to affected by it were not
impleaded in the petition and moreover intervention at this stage when
Appellant had superannuated, would disturb the settled position enuring in
favour of a large number of officials. It also held that the Appellant had no
overriding right in law, to claim seniority in DDA by including his past
service in Railways. With regard to the second issue, the learned Single Judge
passed the following order on 7th February, 2006:
LPA No. 266/2009 Page 4 of 25
“33. I am of the opinion, in the facts of this case, that the
petitioner was entitled to be reckoned as a confirmed employee
of DDA, when it declared his probation to have been
successfully completed, in 1983, as per its letter dated
7.11.1984; as per its own admission, he was entitled to quasi
permanent status on 15.7.1984. Therefore, his entitlement to
pension, and other terminal dues payable on the basis of
continuous service from 14.7.1981, stands established. The
DDA is liable to the period 14.7.1981 to 30.9.1994, when he
retired from its services. He would be entitled to pro-rata/
proportionate pension, gratuity, and other terminal benefits for
that period, on the basis of his pay having been fixed @ 660/-
per month in the grade of Rs. 425-700 in DDA, with
consequential increments in DDA.
34. As far as pension and benefits for the period the
petitioner was with the railways is concerned, I am of the
opinion that in the absence of pleadings, and a categorical
assertion that no pension or amounts were paid to the
petitioner, for the period of his service, by the railways, it
would not be safe to give a declaration about his entitlement.
However, the materials on record justify a direction to the
railways to consider all the aspects, in relation to the
petitioner‟s admitted service of more than 20 years, and pass a
suitable order, as to the payment of pro-rata pension with
terminal benefits, as per the circulars, rules and guidelines
applicable, and having regard to the facts that the petitioner
was permitted to voluntarily retire from the Railways from 14-
7-1983.
35. A direction is issued to the DDA to treat the petitioner as
its confirmed employee, with effect from the date he joined the
post, on 14th July, 1981, and pass a consequential pension
fixation order, on the basis of the last pay drawn, after pay
fixation at Rs. 660/- p.m. in the grade of Rs. 425-700 for the
period 14.7.1981 and 30.9.1994, as per its rules andLPA No. 266/2009 Page 5 of 25
guidelines/circulars. The amounts admissible towards pension
arrears, and other terminal benefits shall be calculated, on the
basis of such order, shall be paid to the petitioner within eight
weeks from today.
36. A direction is hereby issued to the railways to consider
all the aspects, in relation to the petitioner‟s admitted service
with it till 13.7.1981, and pass a suitable order, as to the
payment of pro-rata pension with terminal benefits, as per its
circulars, rules and guidelines, and having regard to the fact
that the petitioner was permitted to voluntarily retire from the
Railways from 14.7.1983. The order shall be a speaking one,
and shall be communicated to the petitioner within eight weeks
from today. In case of any grievance arising out of the order,
the petitioner is at liberty to question it in accordance with
law.”
5. The Appellant not satisfied by the order dated 7 th February, 2005 filed a
review petition before the learned Single Judge. The review petition was
dismissed on 17th February, 2009 on the ground that there was no error
apparent.
6. Aggrieved by the orders dated 7th February, 2006 and 17th February,
2009, the Appellant has preferred the present appeal. The main contention of
the Appellant before us is that he was not appointed as a direct recruit by the
DDA but was on deputation from Railways and thus on his absorption he was
entitled to all the benefits as are available to him in the erstwhile Railway
Ministry as well. It is contended that the learned Single Judge has committed
a factual error because of which the Appellant is losing the combined effect of
LPA No. 266/2009 Page 6 of 25
the two services. Alternatively, it is stated that the Appellant is entitled to
seniority from the date of absorption or at least from the date of termination of
lien and consequential promotion. It is also contended that the DDA had no
source of power to take such an undertaking and even if it is assumed that the
undertaking is taken the same is not applicable in view of the Fundamental
Rules. In support of his contentions the Appellant relies on the decisions
rendered in Vijaya Kumar Shrotriya v. State of U.P. and others, AIR 1998
SC 1088, Sub-Inspector Roop Lal and Another v Lt. Governor Through
Chief Secretary, Delhi and others, 2000 (1) SCC 644, and Ramesh K.
Sharma and Another v Rajasthan Civil Services and others, 2000 (7)
Supreme 622 and by this Court in Mr. G.R.Chawla and others v Delhi
Development Authority and Another in CWP No.1768/1988.
7. Per contra, the learned counsel for the Respondent No.1 in support of
its contentions rely upon the OM dated 22nd January 1966 reiterated on 2nd
March, 1987 wherein it was clearly mentioned that the Government will not
accept any liability to pay any retiral benefits or to carry forward of leave for
the period of service rendered under the Government on transfer of the
employee to the autonomous Central Organizations. In an exceptional case
where the permission was to be given to retain his lien in the parent
department for one year such permission was to be given on an undertaking as
LPA No. 266/2009 Page 7 of 25
stipulated in clause 2. It is contended by learned counsel for the Respondent
No.1 that the present is a case of fresh appointment in the service of
Respondent No.1 and hence the Appellant is not entitled to reliefs sought for.
Learned counsel for the Respondent No.1 states that on employment with the
DDA the Appellant would be governed by the Delhi Development Authority
(Salaries, Allowances and Conditions of Service) Regulations, 1961. Learned
counsel for the Respondent No. 1 further contends that there is neither any
rule having force of law nor any administrative instruction that permits
retention of past service for the purpose of seniority. It is further stated that
the persons who would be adversely affected by the seniority, if granted to the
Appellant, are not parties before this Court and hence this appeal is liable to
be dismissed on this ground itself. Thus, according to him a new entrant to the
service cannot retain his past service for the purpose of seniority on joining a
new organization unless the rules having force of law clearly permit him to do
so. It is further contended that the fundamental rules stipulate counting of past
service only for fixing the salary and not for seniority and promotion.
According to him, in the present case, the incumbent has submitted an
undertaking giving up his past service for seniority and now he cannot turn
around and claim the same. It is further contended that the petitioner was
informed in the year 1981 that his past service will not be counted for the
LPA No. 266/2009 Page 8 of 25
purpose of seniority. His representation was rejected on 17 th February, 1983
and the writ petition filed in the year 1990 was a highly belated one and ought
to have been rejected on this ground itself. It is further contended that the
relevant rules and instructions permit the incumbent either to opt for pro-rata
pensionary benefits from the two organizations separately or one single
pension from the new organization in which case, the old organization is
required to hand over its contribution for the relevant period to the new
employer. In the present case, even before the retirement of the Appellant, the
DDA in the year 1992 had desired to hand over to the Railways its
contribution. The Railways also agreed and the petitioner was asked to submit
his option in the year 1996, but he chose not to do it. The Railways again
made an offer in the year 1999 during the pendency of the writ petition,
however again the Appellant did not submit his option. It is submitted that
in view of these facts, the learned Single Judge directed grant of pro-rata
pension to the Appellant. Learned counsel for Respondent No.2 also
contended that the OMs issued under the CCS Pension Rules would have no
application as the Railways has its own pension rules governing its
employees. In the writ petition no reply was filed by the Respondent No.2
/Railways. In the present LPA the Railways has filed a reply stating therein
that in the absence of status of absorption of the Appellant in DDA
LPA No. 266/2009 Page 9 of 25
determination of the exact amount of various settlements including FAC
charges was not feasible by the Railways and the Railways have never denied
from paying their liabilities to the Appellant and the delay if any was due to
the fact that the required action was not taken from the side of the Appellant.
It is stated by the Railways that it clearly conveyed the approval to the DDA
that subject to Shri Dhawan paying FSC for the period from 14th July, 1981 to
14th July, 1983 Railway Ministry had no objection to discharge its liabilities in
the matter of pensionary benefits subject to the nature of option exercised by
the Appellant that is either he would by paid pro rata pension for the Railway
service or allow the benefit of continuity of Railway service for pension in the
autonomous body as per his option. Thus the Respondent No.2 was prepared
to pay their part of the pensionery benefits subject to the Appellant exercising
his choice.
9. We have heard learned counsel for the parties and perused the records.
The judgments relied upon by the learned counsel for the Appellant have no
relevance to the facts of the present case. The decision of the Hon‟ble
Supreme Court in Vijaya Kumar Shrotriya v. State of U.P. and Ors. AIR
1998 SC 1088 deals with a case of transfer wherein by means of letter dated
19th October, 1968, it was directed that Assistant Engineers in Public Works,
Irrigation and ESGE department who came through competitive examinations
LPA No. 266/2009 Page 10 of 25
and are working in any of the said departments if allocated to any such
department, they would be deemed to have been transferred from one
department to the other. A case of transfer or/and absorption is on a totally
different footing then the present one where there is fresh selection de-hors
the earlier appointment. In Ramesh K. Sharma and Anr vs. Rajasthan Civil
Services and Ors. 2000 (7) Supreme 622, the Court was dealing with
Seniority inter se direct recruits and deputationists subsequently absorbed.
That being a case of absorption pursuant to deputation, the Court held that the
two should be treated to be equal. Similarly, in Sub-Inspector Roop Lal and
Anr v. Lt. Governor and Ors, (2000) 1 SCC 644, the Court was dealing with a
case of deputationist who was subsequently absorbed. The present is neither a
case of transfer nor absorption, but a case of fresh appointment simplicitor
along with an undertaking rendered by the Appellant.
10. As regards the claim of seniority and promotion on the basis of
inclusion of past service, we find no infirmity in the finding of the learned
Single Judge. The Appellant is claiming seniority from 1970, alternatively
from 1979 and in case this Court or the learned Single Judge would have
assigned that particular seniority to the Appellant, the same would have upset
the seniority position of the other people. None of them were impleaded as
party in the proceedings not even in representative capacity. Seniority is a
LPA No. 266/2009 Page 11 of 25
legal right and if a new entrant is allowed to retain his past service for the
purpose of calculating seniority then it shall adversely affect the seniority of
existing employees in the cadre.
11. We may note that the Appellant can claim seniority only on the basis of
some Rule, Regulation or condition of service of the DDA, the organization
where he joined subsequently by way of direct recruitment. No such Rule,
Regulation or Statutory provision has been shown to assert the legal right of
the Appellant qua the claim of seniority and promotion. Thus the learned
Single Judge rightly did not accept the claim of seniority and promotion on
the basis of inclusion of past service.
12. The second issue concerns the pensionary benefits to the Appellant.
There is a fundamental difference between the appointment of Appellant with
the DDA and that of a person who comes from another department or
organization on deputation and is subsequently absorbed. The latter is a case
of continuous service but the prior is a case of discontinuation of service with
his earlier employer and a case of fresh appointment with the new employer.
Thus, on the fresh appointment, the Appellant would be governed only by the
relevant Rules, Regulations and provisions of Respondent No.1.
LPA No. 266/2009 Page 12 of 25
13. We also do not find any force in the contention of learned counsel for
the Appellant that Respondent No.1 had no source of power to take the
undertaking from the Appellant. We may note that no Rule, Regulation or
provision has been pointed out by the Appellant to assert his right. In the
absence of any Rule, Regulation or provision to the contrary the Respondent
No.1 was well within its right to take an undertaking as a matter of abundant
caution. Even if this undertaking was not taken no right accrues to the
Appellant to claim pensionary benefits from DDA for his employment under
Railways. Moreover the notings of the officers of DDA referred to by the
learned counsel for the Appellant to butress his case, would not entitle him to
a right in the absence of the Rules and Regulations in this regard. It may be
noted that the consistent stand of DDA in its affidavits has been that the
appointment of the Appellant was as a fresh recruit and it was not a case of
absorption on transfer or deputation.
14. Learned counsel for the Respondent No.1 has relied upon the circular
dated 22nd January, 1966 reiterated on 2nd March, 1987 wherein it has been
clearly laid down that if a permanent Government servant is selected for
appointment in a public sector undertaking or autonomous semi Government
organization on the basis of his application for such post, his lien in the parent
department will be retained for a period of two years or till he is permanently
LPA No. 266/2009 Page 13 of 25
absorbed, whichever is earlier, subject to the condition that he would give an
undertaking that the Government will not accept any liability to pay any
retirement benefits or for carry forward of leave for the period of service
rendered under the Government. Thus, the contention that the DDA could not
have taken the undertaking from the Appellant is incorrect. OM dated 2nd
March, 1987 is reproduced as under:-
“OFFICE INSTRUCTION NO.-E-107, DATED THE 21ST
JANUARY, 1966.
No. 70/62/62-Ests (A)
Government of India
Ministry of Home Affairs
—-
New Delhi-1, 22nd January, 1966
2nd March, 1987
OFFICE MEMORANDUM
Subject: Forwarding of application of Central Government
Servants for posts in Public Sector Undertakings,
autonomous bodies, etc.The undersigned is directed to refer to para 2(v) of
Ministry Home Affairs Office Memorandum No. 170/51-Ests
dated the 21st October, 1952, under which when a Government
servant seeks permission to apply for employment in private
business or industrial firms etc. he should first offer to resign or
retire from Government service. The question as to whatLPA No. 266/2009 Page 14 of 25
procedure should be followed in respect of permanent
government servants who apply in response to advertisements or
circulation of vacancies to Government for posts in public sector
undertakings whether incorporated or not, which are wholly or
substantially owned by the Government of India or the State
Government and in autonomous semi-Government organizations,
has been under consideration for some time past. It has now been
decided that permanent Government servants who are selected
for appointment in public sector undertakings or autonomous
semi-Government organizations on the basis of their applications
for such posts should be allowed to retain a lien on their
permanent post in the parent office for a period of two years or
till they are permanently absorbed in the undertaking, etc. which
ever is earlier, subject to the following conditions: –
(i) The leave salary and pension contributions should be paid either
by the undertaking organization or by the Government servant
concerned himself.
(ii) The pay allowed to him by the undertaking organization should
not exceed the limits specified in Ministry of Finance OM
No.10(24)-E.III/60, dated the 9th March, 1964, and such other
orders restricting pay on foreign service as may be issued by the
Ministry of Finance from time to time.
(iii) If it is proposed to absorb the Government servant permanently
in the public sector undertaking/autonomous semi-Government
organization before the expiry of the period of two years
mentioned above, it would be incumbent on the foreign employer
to consult the parent office before issuing orders absorbing the
Government servant permanently, and the orders of permanent
absorption should be issued by the foreign employer only after
the resignation of the Government servant has been accepted by
the Government and with effect from the date of such acceptance
vide Ministry of Finance OM No.4(3)-e.IV/A/68, dated the 1st
October, 1968.
(iv) Since the transfer in such cases is not in the public interest the
Government will not accept any liability to pay any retirementLPA No. 266/2009 Page 15 of 25
benefits or for carry forward of leave for the period of service
rendered under the government.
(v) If the Government servant is not permanently absorbed within a
period of two years from the date of his appointment in the public
sector undertaking/autonomous semi Government organization in
the manner indicated at (iii) above, he should immediately on
expiry of the said period of two years, either resign from
Government service or revert to his parent office.
(vi) In exceptional cases where it would take some time for the public
sector undertaking, autonomous body, etc. to permanently absorb
such Government servant due to administrative reasons, the
permanent Government servant may be permitted to retain his
lien in the parent department/office for one more year. While
granting such permission, a fresh undertaking similar to the one
referred to in paragraph 2 below may be taken from the
permanent Government servant by the parent Department/office.
A similar treatment may be accorded to the quasi-permanent
employees.
2. In view of the above decision, applications from
permanent Government servants for posts (whether temporary or
permanent) in public sector undertakings/autonomous semi-
Government organization should be forwarded only after taking
from them a written undertaking accepting the conditions
stipulated above and the foreign employer should also be
informed of these conditions.
3. As regards quasi-permanent employees, it has been
decided that all quasi-permanent employees applying for post in
the public sector undertakings/autonomous semi government
organization should be treated as on foreign service with the
undertakings/organizations for a period of two years and given
the same treatment as permanent employees vide para 1-2
above.
4. These orders do not apply to temporary employees, who
will have to resign from Government service before they are
appointed in such undertakings/organizations on the basis of
their own applications. It is therefore necessary in such cases
to obtain from the Government servant concerned before theirLPA No. 266/2009 Page 16 of 25
application is actually forwarded, an undertaking that in the
event of selection for the post applied for, they will resign from
Government service.
5. The Ministry of Finance etc. may kindly bring the above
instructions to the notice of all concerned and also to the public
sector undertaking autonomous semi-Government
organizations with which they are administratively concerned.
6. In so far as the officers serving in the Indian Audit and
Accounts Department are concerned, these orders have been
issued after consultation with the Comptroller and Auditor
General of India.
Sd/-
R.M.Shroff
Deputy Secretary to the Government of India.”
15. In view of the Ministry of Railway circulars dated 16th April, 1986, 9th
January, 1986 and 31st March, 1986, which state that an employee permitted
to be absorbed in autonomous body or centrally controlled organisation, could
opt for pro-rata pension the learned Single Judge rightly directed grant of pro
rata pension to the Appellant. The relevant portion of the circulars adopted by
the Indian Railways for its employees absorbed in Central Government
controlled bodies/PSUs are as follows:
“GOVERNMENT OF INDIA (BHARAT SARKAR)
MINISTRY OF RAILWAYS/RAIL MANTRALAYA
(RAILWAY BOARD)LPA No. 266/2009 Page 17 of 25
No. F(E)III/86 PN 1/5 dated 16/04/86
Subject :- Grant of pro-rata retirement benefits to Railway
Employees on immediate absorption basis in
P.S.E.
A copy each of Department of Public Enterprises (BPE)‟s
O.M. No.3 (2)/85/BPE-S&A Cell dated 9.1.1986 and
DOPT&T‟s O.M. No. 28016/5/85-Estt. (C) dated 31.01.1986
regarding terms and conditions and the retirement benefits
admissible to the Government Employees on their immediate
absorption in Central Public Enterprises are enclosed herewith
for information and guidance.
2. Orders contained in the above O.M‟s will apply mutatis
mutandis to the Railway Employees also. These orders are
effective from 6.3.1985 but the cases already settled on and
after 6.3.1995 will not be reopened.
3. Orders corresponding to BPE‟s O.M. No. 5(25)/83-
BPE(PESB) dated 6.3.1985 referred in the above office
memorandum dated 9.1.1986 and 31.1.1986 have been issued
under the Department‟s letter No. F(E)II-86/DE 1/1 dated
25.03.1986.
No. 3(2)/85/BPE-S&A Cell
Government of India
Ministry of Industry
Department of Public Enterprises
(bureau of Public Enterprises)
S&A CellPublic Enterprises Bhawan,
Block-14, CGO Complex,
Lodhi Road, New Delhi-3.
Dated the 9th January, 1986
Subject:- Pro-rata pension/gratuity and other retirement to
Government Servants who join Central PSE‟s on
LPA No. 266/2009 Page 18 of 25
immediate absorption basis clarification
regarding.
The undersigned is directed to refer to the BPE‟s O.M. No.
5(25)/83/BPE(BPSB) dated 6th March 1985 banning
deputation of Central Government employees, save exceptions
made therein, to Central PSEs and to say that a doubt has been
raised as to whether the liberalized pro-rata retirement benefits
which are, at present, admissible to those Central Government
employees who, while on deputation to Central PSEs, opt for
permanent absorption in the undertaking, can be allowed to the
Government servant who join Central PSEs on immediate
absorption basis. It is hereby; clarified that the Central
Government of Employees who join Central PSE‟s on
immediate absorption basis are entitled to the same pensionary
benefits as are admissible to deputationist Central Government
Officers who opt for permanent absorption, irrespective of the
fact that appointment of some of those employees in the public
Enterprises may be on probation of a given period. In other
words, the immediate absorption is to be treated as permanent
absorption so far as pensionay benefits to Central Government
employees are concerned.
2. The stipulation of immediate absorption will apply to all
appointments of Central Government servants in the Central
Public Enterprises, irrespective of the level of appointment
and whether the appointment is in public interest or otherwise,
provided they had applied through proper channel and that
they had been released only after obtaining and accepting their
resignation from the Government service. Since the
admissibility of aforesaid terminal benefits is limited to those
officers who leave Government service to secure employment
in the enterprises, with prior permission, the case for grant of
these benefits may be processed only after ascertaining from
the Enterprises concerned that the officer has actually joined
them.
3. Cases of grant of pensionary benefits to Central
Government employees who join Central Public Enterprises
on immediate absorption basis as well as those who opt, whileLPA No. 266/2009 Page 19 of 25
on deputation to PSE‟s, for permanent absorption should
continue to be referred to the Bureau of Public Enterprises.
4. This issues with the concurrence of the Ministry of
Personnel and Training (Department of Personnel) and
Ministry of Finance (Department of Expenditure).
No.28016/5/85-Estt.(C)
Government of India
Ministry of Personnel, Public Grievances and Pensions
(Department of Personnel & Training)
New Delhi, the 31 January, 1986OFFICE MEMORANDUM
Sub:- Appointment of Central Government servants in
the Central Public Enterprises on immediate
absorption basis terms and conditions of.
The undersigned is directed to say that instructions were
issued vide the Ministry of Finance (Bureau of Public
Enterprises) O.M. No. 5(25)/83-BPE(PESB) dated 06.03.1985
to the effect that save in the exceptional cases mentioned
therein, deputation of Central Government servants to the
Central Public Enterprises would not be allowed and the
officers could join the enterprise only on immediate absorption
basis. The modalities of appointment of Government servants
in the enterprises after the issue of these instructions, as also
the question of granting terminal benefits to the Government
servants going over to the enterprises on immediate absorption
basis has been under consideration of the Central Government
and it has been decided that the appointment of Government
servants in the Central Public Enterprises will be on the
following terms and conditions:-
1. Release of the Government servants for appointment in
the enterprises:- A Government servant who has beenLPA No. 266/2009 Page 20 of 25
selected for a post in a Central Public Enterprise may be
released only after obtaining and accepting his resignation
from the Government Service.
2. Retention of lien/quasi-permanent status:- No
lien/quasi-permanent status of the government servant
concerned will be retained in his parent cadre. All his
connections with the Government will be served on his release
for appointment in an enterprise and he will not be allowed to
revert to his parent cadre.
3. Pay fixation:- A Government servant selected for a
post in a Central Public Enterprise will be free to negotiate his
emoluments with the enterprise. On appointment to a post in a
public sector enterprise on immediate absorption basis, a
Government servant will be at par with other employees of the
enterprise and will be governed by the rules of the enterprise
in all respects.
4. Pensionary benefits:-
i Resignation from Government service with a
view to secure employment in a Central Public Enterprise with
proper permission will not entail forfeiture of the service for
the purpose of retirement/terminal benefits. In such cases the
Government servant concerned shall be deemed to have retired
from service from the date of such resignation and shall be
eligible to receive all the retirement/terminal benefits as
admissible under the relevant rules applicable to him in his
parent organisation.
ii The officer eligible for pension should exercise
an option with 6 months of the date of his resignation for
either of the following two alternatives:-
a Pro-rata monthly pension and death-cum-
retirement gratuity as admissible under the
relevant rules.
b. Pro-rata gratuity and lump sum amounts in
lien on pension worked out with reference to the
LPA No. 266/2009 Page 21 of 25
commutation tables applicable on the date of
resignation.
NOTE: Where no option is exercised within the
prescribed time limit, the officer will be governed by
alternative (a) above. Option once exercise shall be treated as
final.
i Any further liberalization of pension rules
decided upon by Government after the date of resignation of a
Central Government servants to join the public enterprise will
not be extended to him.
ii A Government servant who opts for pro-rata
monthly pension on his resignation from government service
will not be entitled to relief on pension during his service in
the public enterprise.
5. Leave:- A Government servant taking up an
appointment in a Central Public Enterprise will be entitled to
encashment of earned leaves to his credit at the time of
acceptance of his resignation from Government service,
subjects to limit of 180 days. Half pay leave will stand
forfeited.
6. Family Pension:- If there is no family pension scheme
in a public enterprise, or if the officer does not become eligible
to join family pension scheme in the enterprise, the family
pension as admissible under the Central Government will be
allowed to him.
2. Absorption means acceptance of resignation of
the officers from Government service to enable him to
take up an appointment in a Central public enterprise,
for which he had applied with proper permission.
3. Since the terminal benefits mentioned above are
admissible only to those officers who leave Government
service to secure employment in the enterprise, with
proper permission, a case of grant of these benefits mayLPA No. 266/2009 Page 22 of 25
be processed only after ascertaining from the enterprise
concerned that the officer has actually joined them.
4. The stipulation of „immediate absorption‟ will apply
to all appointments of Central Government servants in
the Central public enterprises, irrespective of the level
of appointment, the mode of recruitment, and whether
an appointment is in public interest or otherwise, but
subject to the exceptions made in the O.M. dated
6.3.1985 referred to above.
5. For the purpose of these orders, a Central public
enterprise is an undertaking wholly or substantially
owned by the Government of India, and which is
accepted as such by the Bureau of public enterprises.
6. The terminal benefits etc. enumerated in para 1
above will be admissible to all Central Government
servants, who secure appointments in Central public
enterprises with proper permissions. A Government
servant selected for appointment in an enterprise on the
basis of an application submitted by him before joining
the Government service will be deemed to have applied
with proper permission for the purpose of these orders.
7. All existing instructions on the subject will stand
amended/superseded to the extent indicated in the
proceeding paragraphs. Formal amendments in the
statutory rules, where considered as necessary, will be
carried out in due course.
8. All cases of grant of pensionary benefits etc.to
Government servants, who are appointed in the Central
public sector enterprises on immediate absorption basis,
shall be decided by the administrative Ministries/cadre
Controlling Authorities/Authority competent to accept
resignation of a Government servant in accordance with
provisions of this O.M. All other cases not covered
under the provisions of this O.M. or which required
relaxation of any provision should continue to be
referred to the Bureau of public enterprises with
necessary service particular. Cases of doubtful natureLPA No. 266/2009 Page 23 of 25
also should continue to be referred to Bureau of Public
Enterprises.
9. The Ministry of Home Affairs etc., may please
bring these orders to the notice of all concerned
including the public enterprises under their
administrative control.
10. So far as the officers serving in the India Audit
and Account Department are concerned, these orders are
being issued after consulting the Comptroller & Auditor
General of India.
11. These orders take effect from 06.03.1985
12. This issues with the concurrence of the Ministry
of Finance (Department of Expenditure) and the
Department of Public Enterprises.”
16. Further even in terms of Rule 53 (1) and 53 (3) of the Railways
Services (Pension) Rules reproduced hereinafter the Appellant is entitled to
pro rata retirement benefits:-
Rule 53(1)
“absorption in a service or post in or under a Corporation or
Company wholly or substantially owned or controlled by
the Central Government or a State Government or in or
under a body controlled or financed by the Central
government or a State Government, shall be deemed to have
retired from service from the date of such absorption and
subject to sub-rule (3), he shall be eligible to receive
retirement benefits.”
Rule 53(3)
LPA No. 266/2009 Page 24 of 25
“Where there is a pension scheme in a body controlled or
financed by the Central Government in which a railway
servant is absorbed, he shall be entitled to exercise option
either to count the service rendered under the railways in
that body for pension or to receive pro-rata retirement
benefit for the service rendered under the railways in
accordance with the orders issued by the railways.”
17. Thus, we find no infirmity in the impugned order. The appeal is
dismissed.
(MUKTA GUPTA)
JUDGE
(MADAN B.LOKUR)
JUDGE
MAY 28, 2010
mm
LPA No. 266/2009 Page 25 of 25