Supreme Court Dismisses Pension Claims of Adult Education Project Employees

The Supreme Court of India, in the case of Parmeshwar Nanda & Ors. v. The State of Jharkhand & Ors., addressed a dispute regarding pensionary benefits for employees of the Adult Education and Non-Formal Education Project. The ruling clarified that employees who were absorbed into government service after the project’s closure were not entitled to count their previous service for pension and seniority.

Background of the Case

The appellants were employed under the Adult Education and Non-Formal Education Project, co-sponsored by the Central and State Governments, in the erstwhile undivided State of Bihar between 1978 and 1990. The project aimed to promote adult education but was closed by a policy decision of the Government of India on April 1, 2001. The employees were declared surplus upon the bifurcation of Bihar and Jharkhand.

Following the closure of the project, the Government of Jharkhand, through a notification dated May 30, 2007, decided to absorb the surplus employees in different state departments. However, this notification specified that the employees’ past service under the project would not be counted for seniority or pay protection.

Key Legal Issues

Were the employees entitled to pensionary benefits for their service under the project?
Could their previous service be considered for seniority and pay protection?
Did the government’s decision violate the Jharkhand Pension Rules?

Arguments by the Parties

Arguments by the Appellants (Employees)

The employees argued that their service under the project should be counted for pension, citing the Jharkhand Pension Rules and a circular dated August 12, 1969, which allowed temporary government servants to qualify for pension after 15 years of service.
They claimed that denying them pensionary benefits while granting them to other employees violated the principle of equality under Article 14 of the Constitution.
Since their salaries were paid from government funds, their service should be treated as government service.

Arguments by the Respondents (State of Jharkhand)

The government argued that the employees were engaged under a specific centrally sponsored scheme and were not regular government employees.
The project was not part of the formal state government cadre, and employees were engaged only for the duration of the scheme.
Under the notification of May 30, 2007, the employees were absorbed as fresh recruits without seniority or pay protection.

Supreme Court’s Observations

The Supreme Court, comprising Justices L. Nageswara Rao and Hemant Gupta, made the following key observations:

1. The Employees Were Not in Government Service

The Court ruled that employment under the Adult Education Project was not equivalent to government service since the project was a temporary, centrally sponsored scheme.

“The appointment of the appellants under the project is not a part of any cadre of the State Government.”

2. The Project Was Not a Permanent Establishment

The Court referred to Rule 58 of the Jharkhand Pension Rules, which states that for service to qualify for a pension, it must:

Be under government control.
Be substantive and permanent.
Be paid by the government.

The Court held:

“The employment of the appellants was under a specific scheme and not a part of a permanent government establishment.”

3. No Automatic Right to Pension

The Court noted that under Rule 59, the state government can declare a specific kind of service as pensionable, but no such declaration had been made for the employees in question.

“Since the project was not part of government service, the employees have no legal right to claim pensionary benefits.”

4. Absorption as Fresh Appointments

The Court emphasized that the notification of May 30, 2007, clearly stated that employees would be treated as fresh appointees without seniority or pay protection.

“Since the appellants were absorbed as fresh appointees, they cannot claim past service for pension.”

Final Judgment

The Supreme Court dismissed the appeal, ruling that:

The employees’ previous service under the project could not be counted for pensionary benefits.
The absorption of employees as fresh recruits was a policy decision and could not be challenged.
The Jharkhand High Court’s decision denying pension and seniority benefits was upheld.

Key Takeaways

Employment under a government scheme does not automatically qualify as government service for pension purposes.
Pension eligibility requires specific government recognition, which was not granted in this case.
Absorption into government service as fresh recruits means past service will not count for seniority or pension.
Judicial intervention in policy decisions is limited unless there is clear arbitrariness or discrimination.

Conclusion

The Supreme Court’s ruling in Parmeshwar Nanda & Ors. v. The State of Jharkhand & Ors. reinforces the principle that employment under a temporary government project does not confer automatic rights to pensionary benefits. The decision upholds the government’s policy of treating absorbed employees as fresh recruits and ensures that pension benefits are granted only to those who meet the required service conditions.

Petitioner Name: Parmeshwar Nanda & Ors..
Respondent Name: The State of Jharkhand & Ors..
Judgment By: Justice L. Nageswara Rao, Justice Hemant Gupta.
Place Of Incident: Jharkhand.
Judgment Date: 07-02-2020.

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