Pensionary Benefits for Commission Vendors: Parity with Casual Labourers in Railway Service

The present case addresses a legal dispute regarding the entitlement of Commission Vendors in Northern Railway for counting 50% of their pre-absorption service towards pensionary benefits, a benefit previously extended to similarly situated employees in other railway zones. The Union of India, through Northern Railways, challenges the High Court’s ruling that granted such benefits to the Commission Vendors who were absorbed into regular railway service after working on a commission basis. The central issue revolves around whether these Commission Vendors are entitled to pension benefits based on their past service before their absorption into regular employment.

Background:
The Commission Vendors were originally working under private contractors managing catering services for Northern Railway. Later, these vendors were absorbed into the Railway service, but their past service as Commission Vendors was not counted towards pensionary benefits. Several legal proceedings arose, questioning whether the Commission Vendors were entitled to the same pensionary benefits as Casual Labourers, who were allowed to count 50% of their service for pension purposes under the Railway Services (Pension) Rules, 1993. The respondents, a group of Commission Vendors, sought to count 50% of their pre-absorption service for pensionary benefits, as granted to their counterparts in other railway zones like Southern and Western Railways.

The legal battle began with the claimants’ plea for pensionary benefits, which was dismissed by the Central Administrative Tribunal (CAT) in 2016. However, in a similar case involving the Southern Railways, a CAT Bench ruled in favor of the Commission Vendors, leading to the High Court’s favorable ruling for the respondents in this case. The High Court directed Northern Railway to grant the same pensionary benefits to the Commission Vendors in Northern Railway as those provided in other zones. The Union of India (Northern Railway) has now appealed the decision before the Supreme Court.

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Appellant’s Arguments:
The appellant, represented by the Union of India, argued that the Commission Vendors should not be entitled to the same pensionary benefits as Casual Labourers. The appellant emphasized that the Commission Vendors were employed on a contractual basis and were paid on a commission-only structure, with no regular salary or pension benefits provided to them during their tenure as vendors. It was contended that the benefits given to Casual Labourers under Rule 31 of the 1993 Pension Rules should not be applied to the Commission Vendors, as they occupied a different status. The appellant also highlighted the financial burden this decision would impose on the Railway Board and public finances.

Furthermore, the appellant pointed out that the Commission Vendors were never regularized in the same manner as casual labourers and were instead absorbed into the Railway service only after being subjected to the policies issued by the Railway Board. The appellant contended that applying the same benefits to the Commission Vendors would be unjustified and would lead to financial strain on the railway system.

Respondent’s Arguments:
The respondents, represented by the Commission Vendors, countered that the denial of pensionary benefits based on pre-absorption service was discriminatory and violative of constitutional provisions. They argued that the Commission Vendors, after being absorbed into regular service, should be treated on par with similarly situated employees from other zones who were granted the benefit of counting 50% of their service for pension purposes. The respondents highlighted that the High Court’s decision to grant them pensionary benefits was based on precedents set by various Tribunals and High Courts, which had allowed similar relief to Commission Vendors in other zones, including Southern Railway.

The respondents further argued that the Railway Board had accepted the principle of granting pensionary benefits to Commission Vendors in other zones, and thus, denying the same benefits to those in Northern Railway created an unjustified distinction. They also pointed out that this denial of benefits violated Articles 14 and 16 of the Constitution, which guarantee equality before the law and prohibit discrimination.

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Court’s Analysis:
The Supreme Court considered the legal framework for the absorption of Commission Vendors and the corresponding pensionary benefits. The Court examined the various rules and policies that applied to Commission Vendors and Casual Labourers. It noted that while the Commission Vendors were employed on a contractual basis, they were absorbed into regular service based on judicial orders and policies of the Railway Board. The Court highlighted that similar claims for pensionary benefits had been granted to Commission Vendors in other zones of the Railways, and the Northern Railway could not treat its employees differently without valid justification.

The Court also addressed the financial concerns raised by the appellant, noting that the Railway Board had implemented similar pension benefits in other zones, and the financial burden argument could not justify discriminatory treatment. The Court emphasized the importance of equality in employment benefits across the Railways and upheld the principle that employees in similar situations should be treated equally.

Judgment:
In its judgment, the Supreme Court dismissed the appeals filed by the Union of India and affirmed the High Court’s decision. The Court held that the Commission Vendors in Northern Railway were entitled to the same pensionary benefits as their counterparts in other zones, specifically the right to count 50% of their pre-absorption service for pension purposes. The Court ruled that the Northern Railway could not deny these benefits based on the financial argument alone and that such denial amounted to discrimination under Articles 14 and 16 of the Constitution.

The Court also emphasized that the Railway Board’s policies and judicial decisions from other zones supported the respondents’ claims. The decision to grant pensionary benefits to the Commission Vendors in Northern Railway was in line with the principle of equality and fairness in employment.

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Conclusion:
This case highlights the legal principle of equality in employment benefits and pension rights. The Court’s decision reinforces the idea that employees in similar situations should be granted the same benefits, regardless of their geographical location. It also underscores the importance of consistent application of rules and policies, especially when these policies are aimed at providing fair treatment to workers who have served under the same employer. The judgment provides clarity on the rights of Commission Vendors in Railway service, ensuring they receive the same pensionary benefits as other employees who were similarly absorbed into regular service.

Petitioner Name: Union of India and others.
Respondent Name: Munshi Ram.
Judgment By: Justice M.R. Shah, Justice B.V. Nagarathna.
Place Of Incident: New Delhi.
Judgment Date: 31-10-2022.

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