Supreme Court of India· 26 July 2024

Can an employee under the Provident Fund Scheme claim pension without holding a pensionable post?

UP ROADWAYS RETIRED OFFICIALS AND OFFICERS ASSOCIATION v. STATE OF U.P. & ANR

CIVIL APPEAL NO. 894 OF 2020 · CIVIL APPEAL NO. 894 OF 2020
Coram: Prashant Kumar Mishra; Hrishikesh Roy

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Answer

No. Pension is a right and not a bounty, but it can be claimed only when it is permissible under the relevant rules or a scheme. An employee covered under the Provident Fund Scheme who is not holding a pensionable post cannot claim pension, nor can a writ court issue mandamus directing the employer to provide it.

Headnote

U.P. Civil Service Regulations - Art. 350, Note 3 - Road Transport Corporation Act, 1950 - s.3 - s.45(2)(c) - Pension - Pensionable post - Provident Fund Scheme - Approbation and reprobation - U.P. Civil Service Regulations - Art. 350 - Pension claimable only under a rule or scheme - Held: Pension is a right and not a bounty, but it can be claimed only where the relevant rules or a scheme permit it. An employee covered by the Provident Fund Scheme who holds no pensionable post cannot obtain a mandamus for pension. (¶35) U.P. Civil Service Regulations - Art. 350, Note 3 - Non-gazetted posts in technical institutions - Held further: Service in non-gazetted posts in Government Technical and Industrial Institutions in Uttar Pradesh does not qualify for pension and is covered by the Contributory Provident Fund Scheme. Note 3 survived the amendment to Article 350. (¶22, 29) Employees Provident Fund Scheme - Retiral benefits already drawn - Approbate and reprobate - Held further: A party to the litigation cannot be permitted to approbate and reprobate after receiving its entire post-retiral benefits without protest. Contributory provident fund retirees form a different class and cannot switch over to the Pension Scheme as of right. (¶30, 31) Precedent - Judgment rendered without reference to the governing Government Orders - Held further: A decision rendered without any reference to the applicable Government Orders and to Note 3 of Article 350 cannot be relied upon as binding precedent. Appeal of the retired employees dismissed and the Corporation's appeals allowed. (¶39, 51)

In the Court's own words

Paragraph 33In the matter of Prabhu Narain vs. State of U.P.19, (2004) 13 SCC 662, this Court held that to receive pension the employees must establish that they are entitled to pension under a particular rule or scheme. The following has been held in para 5: “5. No doubt pension is not a bounty, it is a valuable right given to an employee, but, in the first place it must be shown that the employee is entitled to pension under a particular rule or the scheme, as the case may be.”

Paragraph 35The common thread in the above referred judgments of this Court is that pension is a right and not a bounty. It is a constitutional right for which an employee is entitled on his superannuation. However, pension can be claimed only when it is permissible under the relevant rules or a scheme. If an employee is covered under the Provident Fund Scheme and is not holding a pensionable post, he cannot claim pension, nor the writ court can issue mandamus directing the employer to provide pension to an employee who is not covered under the rules.

Acts & Sections

Art. 350 U.P. Civil Service Regulationss.3 Road Transport Corporation Act, 1950s.45(2)(c) Road Transport Corporation Act, 1950Regulation 39 U.P. State Road Transport Corporation Employees (other than Officers) Service Regulations, 1981

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Also decided in this judgment

Can retired employees who drew Provident Fund benefits later claim pension instead?Is a High Court judgment given without noticing the governing Government Orders a binding precedent?

Plain-language answer prepared by the LexStreak Editorial Desk — verify against the judgment. Source: Supreme Court of India. Corrections