Contractual Service to Be Included in Pension Benefits After Regularization: Supreme Court
The Supreme Court in S.D. Jayaprakash & Ors. v. Union of India & Ors. held that government employees initially appointed on a contractual basis and later regularized are entitled to pensionary benefits for their entire service period, including the contractual tenure.
A bench comprising Justices P.S. Narasimha and Joymalya Bagchi ruled that once an employee is regularized, the entire service period must be counted for pension, overriding Rule 2(g) of the Central Civil Services (Pension) Rules, 1972, which excludes contractual service. The Court relied on Rule 17 of the Pension Rules, which mandates inclusion of past contractual service upon regularization for pension purposes.
Referring to State of Himachal Pradesh v. Sheela Devi, 2023 SCC OnLine SC 1272, the Court reiterated that Rule 17 was specifically enacted to address such situations and clarified that for pension purposes, contractual service must be considered post-regularization.
Consequently, the appeal was allowed, and the Union of India was directed to promptly implement Rule 17 by notifying the procedure for the appellants to exercise their option and specify any amounts payable for availing pension benefits.