State Employees On Deputation Not Eligible For Pension Under Central Civil Service: Supreme Court

Supreme Court Rules: Deputed State Employees Not Entitled to Central Pension

 

In a pivotal judgment, the Supreme Court of India has ruled that state government employees on deputation to central government roles are not entitled to pension benefits under the Central Civil Services (Pension) Rules, 1972, unless explicitly absorbed into the central service. This landmark decision was delivered in the case of Union of India v. Phani Bhusan Kundu & Ors.

 

Background

 

Phani Bhusan Kundu, a senior officer in West Bengal’s Veterinary Services, was deputed to serve as Animal Husbandry Commissioner in the Ministry of Agriculture in 1991. Although his deputation was scheduled to end in August 1992, administrative delays extended his tenure until his retirement in September 1992.

 

Post-retirement, Kundu claimed that his pension should be calculated based on the central pay scale for his deputed post. The Central Administrative Tribunal (CAT) and later the Calcutta High Court ruled in his favor, directing the central government to provide pension benefits under the CCS (Pension) Rules, 1972. The Union of India appealed to the Supreme Court.

 

Key Issues

 

The Supreme Court focused on:

 

1. Deputation and Absorption: Does deputation entitle an employee to absorption or benefits in the borrowing department?

 

 

2. Pension Rules Applicability: Should a deputed employee’s pension follow the central or state rules?

 

 

3. Lien on Parent Department: Did Kundu maintain a lien with the West Bengal government during his deputation?

 

 

 

Supreme Court’s Observations

 

The bench, comprising Chief Justice Sanjiv Khanna and Justice Sanjay Kumar, overturned the earlier rulings, stating:

 

Deputation is Temporary: Deputation does not confer rights to absorption or pension benefits in the borrowing department.

 

Lien in Parent Department: Kundu’s substantive post and pension rights remained with West Bengal throughout his career.

 

No Right to Central Pension: Since Kundu was never absorbed into the central government, he could not claim pension under the CCS (Pension) Rules, 1972.

 

Distinguishing Precedents: Previous judgments on deputation eligibility were deemed inapplicable to pension entitlements.

 

 

Verdict

 

The Court ruled that Kundu’s pension would be governed by the West Bengal Services (Death-cum-Retirement Benefit) Rules, 1971, dismissing his claim for central pension benefits. The Union of India’s appeal was allowed.

 

Legal Representation

 

The Union of India was represented by Additional Solicitor General K. M. Nataraj and a team of advocates. Senior advocate Ashok Kumar Panda led Kundu’s legal defense.

 

This ruling sets a crucial precedent in service law, reinforcing the temporary nature of deputation and clarifying pension entitlements for deputed employees.