An employee becomes ineligible for pension under the Central Civil Services Pension Rules (CCS Pension Rules) when he resigns because he forfeits his past service, the Supreme Court (SC) ruled on Thursday.
The apex court made a distinction between voluntary retirement and resignation which impacts pensionary benefits under the Rules while deciding a case relating to resignation of an employee of BSES Yamuna Power Limited.
“The decision to resign results in the legal consequences that flow from a resignation under the applicable provisions. These consequences are distinct from the consequences flowing from voluntary retirement and the two may not be substituted for each other based on the length of an employee’s tenure”, the court held.
The CCS Pension Rules apply to government servants including civilian government servants in the Defence Services appointed before December 31, 2003.
As per the rules, an employee forfeits his past service upon resignation, consequently disentitling him to pension. However, an employee who has completed 20 years of service can voluntarily retire from service, which will enable him to avail of pensionary benefits.
In this case, the employee, Ghanshyam Chand Sharma, had resigned from service on July 7, 1990. He was subsequently denied pension on the grounds that he had forfeited his past service by resigning. Additionally, the company also argued that Sharma had not completed 20 years of service which would have entitled him to take voluntary retirement.
{{/usCountry}}In this case, the employee, Ghanshyam Chand Sharma, had resigned from service on July 7, 1990. He was subsequently denied pension on the grounds that he had forfeited his past service by resigning. Additionally, the company also argued that Sharma had not completed 20 years of service which would have entitled him to take voluntary retirement.
{{/usCountry}}The Delhi high court had ruled in favour of the employee on the grounds that he had completed 20 years of service and his resignation should, therefore, be treated as voluntary retirement. The high court ordered the payment of pensionary benefits to Sharma, following which the BSES went in appeal to the Supreme Court.
The Supreme Court noted that Sharma had resigned from service after his application for voluntary retirement was rejected on the grounds that he had not completed 20 years of service.