High CourtDivision Bench2006-10-31Appeals disposed of.

R.K. Agrawal v. State of Rajasthan and Anr.

Case / Petition Number:Civil Appeal Nos. 8127/2004 and 8128/2004

Neutral Citation:2006 (Supp.) 8 S.C.R.

Case Details & Bench

Court: High Court
Hon'ble Judges: Dr. A. R. Lakshmanan
Tarun Chatterjee
Judgment Date: 2006-10-31
Court Decision / Holding: Both appeals disposed of. The Supreme Court set aside the High Court’s judgment and remitted the matter to the Rajasthan High Court for disposal afresh by a Division Bench within three months, directing consideration of timely pension, pro-rata pension under Rule 158, and interest on delayed payments in light of pleadings; it also clarified that Welfare Association (1998) and Sundara Rajan (2000) judgments are inapplicable to this case.
Final Disposition: Appeals disposed of.

Parties to the Case

Appellants / Petitioners

R.K. Agrawal

Respondents

State of Rajasthan
Anr.

Legal Representation & Advocates

Counsels for Petitioners

• N. Prabhakar
• Rajesh Srivastava
• Ansar Ahmad Chaudhary
• Manish Kumar Chaudhary

Counsels for Respondents

• N. Prabhakar
• Rajesh Srivastava
• Ansar Ahmad Chaudhary
• Manish Kumar Chaudhary

Case Synopsis & Summary

This Supreme Court decision concerns the computation of pension and the right to interest on a delayed pension, arising from two connected appeals (Civil Appeal Nos. 8127/2004 and 8128/2004) arising out of a writ petition in the Rajasthan High Court. RK. Agrawal challenged the High Court’s directions requiring the State of Rajasthan to pay pension for the period 26 July 1979 to 22 July 1982 and to consider pro-rata pension as admissible under Rule 158 of the Rajasthan Service Rules, while the State sought to oppose pension for that period and to deny such service for qualifying purposes, arguing that delays and lapses in payment were not properly dealt with, and that Rules 13, 17, and 18 and related Govt. orders did not support pro-rata pensions or the counting of certain absorptions. The High Court’s judgment did not decide several critical issues—including the relevance of Rule 158, the interplay of Rules 13, 17, 18, and the delay-induced interest claim—necessitating a remand. The Supreme Court set aside the High Court’s order, remitting the matter for fresh decision by a Division Bench within three months, and highlighted that delay in payment attributable to the Government may warrant interest, and that the High Court should decide these issues with pleadings on record. The Court also clarified that certain earlier judgments (Welfare Association and P.V. Sundara Rajan) are not applicable to the facts of this case.

Provisions of Law Cited

Rajasthan Service Rules (R.S.R.)Rule 158 (R.S.R.)Rules 13, 17, 18 (R.S.R.)Government Order No. F.1(48) FD (Rules)/68 dated 10.4.1969, Para 4, Sub Para (iii) ADecision No. 5 and Decision No. 6 (G.O. related)

Submissions & Arguments

Contentions of Appellants / Petitioners

The applicant contends that the pensioner was entitled to pro-rata pension under Rule 158 of the Rajasthan Service Rules upon permanent absorption into Public Enterprises, with due consideration of the five-year pocket prescribed, and that the High Court failed to decide the applicability of Rule 158, as well as the relevance of Rules 13, 17, and 18, in the context of a government service transferred to a public enterprise. It argues that the period 26 July 1979 to 22 July 1982, though outside regular government employment, must count as qualifying service or merit pro-rata pension; it also seeks interest on the delayed payment, arguing that the 20-year delay is the Government’s fault and should produce interest at a reasonable rate. Additionally, the petitioner asserts that the two referenced welfare decisions and the Sundara Rajan decision are inapplicable to the facts, and calls for a thorough examination of the interplay between absorption, pension, and service qualification.

Contentions of Respondents

The State of Rajasthan contends that pension for the disputed period cannot be granted since the employee was not in government service during that time, and that rules governing pro-rata pension and counting of service do not apply to absorption into public enterprises in the manner claimed. It maintains that Rules 13, 17, and 18 define service to mean government service funded from the Consolidated Fund and that service in non-pensionable or contingencies-based posts should not be treated as qualifying service. It further argues that the delays do not automatically entitle the pensioner to interest and seeks dismissal of the pro-rata pension claim. The State relies on the cited high court decisions and argues that delays cannot be deemed Government fault without a proper factual basis and pleadings to support such a conclusion; it emphasizes that the High Court’s failure to decide critical issues warrants remand and re-evaluation under the proper legal framework.

Cited Precedents (2)

Case Name	Citation	Treatment	Explanation
Welfare Association of Absorbed Central Government Employees in Public Enterprises & Anr. v. Arvind Verma & Ors.	AIR (1998) SC 2863	Mentioned Only	Cited but held inapplicable to the facts and circumstances of this case.
P. V. Sundara Rajan & Anr. v. Union of India	JT (2000) 5 SC 175	Mentioned Only	Cited but held inapplicable to the facts and circumstances of this case.

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Extracted Judgment Text

Exact text extracted from official judgment records.

## R.K. AGRAWAL. _v._ ST A TE OF RAJASTHAN AND ANR. OCTOBER 31, 2006 [DR. AR. LAKSHMANAN AND TARUN CHA TIERJEE, JJ.] ## _Service law:_ _Pension-Qualifying service-Computation of-Delay in grant of pension-Claim for interest-Held, since High Court has not considered the_ C _relevance of certain provisions of the Rules, relied upon by the parties, the impugned judgment is set aside and matter remitted to it for consideration afresh._ Respondent No. 1, in Civil Appeal No. 8127 of2004 filed a writ petition D before the High Court for a direction to the State of Rajasthan to pay him pension for the period 26.7.1979 to 22.7.1982. The writ petition was allowed, but his prayer for interest on delayed amount of pension was not acceded to. Aggrieved, the State Government filed Civil Appeal No. 8128 of2004 and the pensioner filed Civil Appeal No. 8127 of2004. E It was contended before this Court that the pensioner in his writ petition before the High Court raised a plea for grant of _pro-rota_ pension admissible to him in terms of Rule 158 of the Rajasthan Service Rules, but the High Court has not rendered any finding thereon. Similarly, the High Court also not considered the relevance of Rules 13, 17 and 18 of the Rajasthan Service Rules, which plea was specifically raised by the State Government. It was F contended that the pensioner could not claim pension for the period 26.7.1979 to 22.7.1982 nor the said period could be counted for qualifying service. ## Disposing of the appeal, the Court HELD: Since several important issues have not been decided by the High G Court, the judgment impugned in thest: two appeals is set aside and the matter is remitted to the High Court for disposal of the same afresh. The High Court has also not considered the delay of 20 years in giving the pension and _prorata_ benefits. If the delay is attributable to the Government, the pensioner is H 207 208 SUPREME COURT REPORTS (2006] SUPP. 8 S.C.R. A always entitled for the interest. The High Court would consider this point also with reference to the pleadings raised by the parties on this count. [211-B-C) _Welfare Association of Absorbed Central Government Employees in Public Enterprises & Anr._ v. _Arvind Verma & Ors.,_ AIR (1998) SC 2863; and B _P. V. Sundara Rajan & Anr._ v. _Union of India,_ JT (2000) 5 SC 175, held inapplicable. CIVIL APPELLATE JURISDICTION: Civil Appeal No. 8128 of2004. From the Judgment and Order dated 30-10-2002 of the High Court of C Judicature for Rajasthan at Jaipur Bench, Jaipur in S.B. Civil Writ Petition No. 540/1999. N. Prabhakar, Rajesh Srivastava, Ansar Ahmad Chaudhary and Manish Kumar Chaudhary for the appearing Parties. - D · The Judgment of the Court was delivered by DR. AR. LAKSHMANAN, J. The State ofRajasthan is the appellant in Civil Appeal No. 8127/2004. The said appeal was filed by the State ofRajasthan 'questioning the validity of the judgment and order dated 30.10.2002 passed by the High Court of Judicature for Rajasthan at Jaipur Bench, Jaipur, in D.B. E Civil Writ Petition No. 540/1999, whereby the writ petition filed by the contesting respondent (R.K. A_grawal) had been allowed and directions had been issued to the State to pay to the respondent pension for the period commencing 26th July, 1979 to 22nd July, 1982. According to the State, the "'espondent was not serving the State Government during that period and, therefore, he is not F entitled for pension for the said period. The Civil Appeal No. 8128 of2004 was filed by the first respondent in C.A. No. 8127 /2004 questioning the correctness of the judgment of the High Court insofar as the non-grant of interest to the contesting respondent. According to the first respondent Mr. R.K. Agrawal, the High Court has failed G to appreciaL that the delay caused by the appellants are more than 20 years in the payment of pension and/or pro-rata benefits to the first respondent was without any fault of the first respondent and as such the first respondent was entitled to interest and damages thereon. The first respondent has claim~ 18% interest per annum for the non payment. H This apart, the first respondent herein and the appellant in CA No. 8128/ 209 ## R.K. AGRA WAL _v._ ST A TE OF RAJASTHAN [ LAKSHMANAN, J.] 2004, in his writ petition before the High Court, has specifically raised in A paragraph 7 for the grant of _pro-rata_ pension admissible to him in terms of Rule 158 of the Rajasthan Service Rules and in support of said contention, decision Nos. 5 & 6 thereunder was relied on for the period rendered by him under the Government of Rajasthan. Our attention was also invited to the relevant part of the governing Decision No. 5 and the extract of Decision No. B 6 for the sake of enabling this Court to correctly appreciate the import and purport thereof. For the sake of convenience, we reproduce relevant portion of the Govt. Order No. F.1(48) F.D. (Rules)/68 dated 10.4. 1969, Para 4, Sub Para (iii) A: "(iii) The Provisions contained in Clauses (i) and (ii) above shall C not apply to a Government Servant transferred to Public Enterprises under the control of the Govt. of India. He shall, however, on his permanent absorption, be entitled to:- A. Pension - (a) Pension and/or Gratuity as admissible under the Rajasthan Service D Rules for service rendered by him under the Government at the end of period of five years of his absorption, provided that if the Govt. Servant concerned, attains the age of superannuation, within these five years, he shall be entitled to receive the benefit~, from the date of superannuation. He shall not be entitled to family E - pension under the Chapter XIII, XIIIA and XIV of the Rajasthan Service Rules. - (b) In lieu of monthly pension admissible under (a) above the Govt. Servant concerned may opt to receive a lump sum amount worked out with reference to the commutation table obtaining on the date F - from which the pension will be admissible and payable. The option will be exercised from six months of absorption. - (c) Any further liberalisation of pension rules decided by the Govt. after the pennanent absorption of the Govt. Servant under the Public Enterprise would not be extended to him. - G - (d) In cases where the Govt. Servant at the time of absorption has less than I 0 years qualifying service he will only be eligible to proportionable retirement Gratuity based on length of service." Extract of Decision No. 6 was also relied on, which is also reproduced herein. Extract of Decision No. 6: H 210 ## SUPREME COURT REPORTS [2006] SUPP. 8 S.C.R. ## A ## B "As per the order of the FD No. F.1(48) FD (Rules) 68/dated 14.4.70 duly amended, the Pension and Gratuity admissible under clause (iii) of Decision No. 5 reproduced above shall be payable to the concerned employee who has been transferred to and absorbed in a Public Enterprise under the Govt. of India after the expiry of two years from such absorption." According to the first respondent, who is also present in the Court, an argument was advanced before the High Court in terms of Rule 158 of the Rajasthan Service Rules and that the High Court has not rendered any finding on the said contention. Likewise, the High Court has also not considered the C relevance of Rules 13, 17 and 18 of the Rajasthan Service Rules, which was specifically raised by the learned counsel appearing for the State of Rajasthan before the High Court. It was submitted th_at the first respondent herein could not claim the pension for the period iii question; namely 26th July, 1979 to 22nd July, 1982 nor this period could be counted for qualifying service because the retaining of the lien is only for the vurpose that the incumbent D could revert back to the service of Rajasthan Government, had he not been confirmed in the services of International Airport Authority, but that does not entitle him to count this period as qualifying service subsequent to any date beyond 26th July, 1979. The High Court has also considered tWo decisions of this Court, one E in the case of _Welfare Association of Absorbed Central Government Employees in Public Enterprises_ & _Anr._ v. _Arvind Verma_ & _Ors.,_ reported in AIR (1998) SC 2862 and Anr in the matter of _P. V. Sundara Rajan_ & _Anr.,_ reported in JT (2000) 5 SC 175. We have carefully perused the above two judgments. In our opinion, both the judgments are not applicable to the faets and circumstances _p_ of this case and are distinguishable on facts and law and wrongly applied by the High Court to the case on hand. In this Civil Appeal, the State of Rajasthan has also raised several other legal issues in support of their appeal. According to the learned counsel for the State of Rajasthan, the service of a Government Servant shall not qualify G unless he is appointed and his duties and pay are regulated by the Government, or under conditions determined by the Government. He has further argued that for the purpose of sub-rule (I) of Rule 13, the expression "service" means service under the Government and. paid . by ~ that Government from ti\e . Consolidated Fund out does not include service in a non-pensionable establishment, work-charged establishment and service· in a post paid from H R.K.AGRAWALv. STATEOFRAJASTHAN[LAKSHMANAN,J.] 211 contingencies, unless such service is treated as qualifying service by that -Government. Though this argument was also raised before the High Court, no specific finding has been rendered by the High Court on this contention also. ... We are of the opinion that since several important issues have not been decided by the High Court, we have no other option except to set aside the B said judgment of the High Court, impugned in this two appeals, and remit the matter to the High Court for disposal of the same afresh. As rightly pointed out by the appellant in Civil Appeal No. 8128/2004, the High Court has not considered the delay of 20 years in giving the pension and _pro-rata_ benefits . If the delay is attributable to the Government, the appellant is always entitled C for the interest. We request the High Court to consider this point also with reference to the pleadings raised by the parties to this action. Since the matter is pending before one forum or the other for more than two decades, we request the High Court to dispose of the writ petition by a Division Bench within three months from today. Both parties are at liberty to file additional documents before the High Court. D , Both the appeals are disposed of accordingly. No costs. R.P. Appeals disposed of.