Case Note & Summary
The Supreme Court heard an appeal by the State of Uttar Pradesh against an order of the Allahabad High Court, Lucknow Bench in a writ petition filed by the Roadways Ministerial Staff Association U.P. The respondent association had challenged Rule 9(II) of the U.P. State Roadways Organization (Abolition of Posts & Absorption of Employees) Rules, 1982, framed under Article 309 of the Constitution, as ultra vires and sought a mandamus restraining the State from changing the status of its members from government servants to Corporation employees. The members of the association were originally government employees who had been sent on deputation to the U.P. State Roadways Corporation. Rule 4(1) of the 1982 Rules required any such deputationist who did not wish to be absorbed in the Corporation to intimate the Secretary to Government in the Transport Department within three months from the notification of the Rules. Rule 5 provided that relevant posts in the U.P. State Roadways Organization would stand abolished; where an employee was deemed to have opted for absorption in accordance with sub-rule (2) of Rule 4, the abolition took effect from the expiry of three months from the notification. Rule 8(ii) stipulated that on absorption, the Government would bear liability for pension (excluding family pension) and gratuity in proportion to the qualifying service rendered by the employee before being placed on deputation, while the entire liability for family pension would be borne by the Corporation. It was admitted that none of the employees had exercised the option not to be absorbed within the stipulated period. The High Court held that the absorption rules were valid but allowed the writ petition in respect of pensionary benefits, directing that employees sent on deputation vide G.O. dated 7.6.1972 as amended by G.O. dated 5.7.1972 would be treated in Government service for pensionary benefits even if not superannuated and still continuing on the date of absorption. The Supreme Court, after hearing counsel, held that the three months cut-off period was appropriate and reasonable. Any employee who failed to give notice within that period must be deemed to be an employee of the Corporation. Consequently, such employees were not entitled to count the period from deputation to absorption as Government service for computation of pensionary benefits. The Court found that the High Court's direction was erroneous. The appeal was allowed, the High Court's order was set aside, and the writ petition was dismissed without costs.
Headnote
A) Service Law - Absorption of Deputationists - Deemed Absorption - U.P. State Roadways Organization (Abolition of Posts & Absorption of Employees) Rules, 1982, Rules 4(1), 4(2), 5 - A Government employee sent on deputation who fails to intimate within three months from the notification of the Rules that he does not wish to be absorbed in the Corporation is deemed to have opted for absorption. The three months cut-off period was held to be appropriate and reasonable. Held that such employees become Corporation employees by operation of Rule 5 from the expiry of three months. (Paras 1-4) B) Service Law - Pensionary Benefits - Government Liability - U.P. State Roadways Organization (Abolition of Posts & Absorption of Employees) Rules, 1982, Rule 8(ii) - Government bears liability for pension (excluding family pension) and gratuity in proportion to qualifying service rendered before the date of deputation, while entire family pension liability is borne by the Corporation. Employees deemed absorbed are not entitled to count the period from deputation to absorption as Government service for computation of pensionary benefits. Held that the High Court erred in directing that such employees be treated in Government service for pensionary benefits. (Paras 1-4)
Issue of Consideration
Whether the High Court was correct in allowing pensionary benefits by directing that deputationists be treated in Government service notwithstanding deemed absorption; whether the three months option period under the Rules is valid; interpretation of Rule 8(ii) regarding pension liability of Government and Corporation.
Final Decision
Appeal allowed; High Court order set aside; writ petition dismissed without costs. Employees who failed to opt out within three months from notification were deemed absorbed as Corporation employees and were not entitled to count the period from deputation to absorption as Government service for computation of pensionary benefits.
Law Points
- Deemed absorption upon failure to exercise option within three months from notification
- Government pension liability limited to pre-deputation qualifying service
- Family pension liability borne by Corporation
- Rule 8(ii) of U.P. State Roadways Organization (Abolition of Posts & Absorption of Employees) Rules
- 1982 interpreted
- Three months cut-off period reasonable
- Employees not entitled to count period from deputation to absorption as government service for pension
