The Supreme Court of India has reaffirmed that employees who voluntarily resign from service are not entitled to pension benefits under the Central Civil Services (Pension) Rules, 1972. This judgment, delivered by a bench comprising Justices Rajesh Bindal and Manmohan, clarifies the legal implications of resignation and voluntary retirement, particularly concerning pension entitlements.
The case stemmed from the appeal of Ashok Kumar Dabas, who resigned from his position as a conductor with the Delhi Transport Corporation (DTC) in 2014 due to family circumstances. His attempt to withdraw his resignation was rejected, prompting him to file a claim for pension benefits. However, both the Central Administrative Tribunal and the Delhi High Court had denied his claim, and the matter was brought before the Supreme Court.
In its ruling, the Supreme Court made a key distinction between resignation and voluntary retirement, with significant implications for pension eligibility. According to Rule 26 of the Central Civil Services (Pension) Rules, employees who resign are not entitled to pension benefits, as opposed to those who opt for voluntary retirement under certain conditions. The Court emphasized that resignation results in the forfeiture of pension rights, which is a legal consequence clearly defined by the pension rules.
While the Court denied the pension claim, it acknowledged Ashok Kumar Dabas’s entitlement to gratuity and leave encashment. The judgment reaffirmed that under the Payment of Gratuity Act, 1972, employees who resign after rendering continuous service for at least five years are entitled to gratuity. The legal heirs of a deceased employee are also eligible for these benefits, which was relevant in this case.
In line with this ruling, the Supreme Court directed the Delhi Transport Corporation to release the gratuity and leave encashment dues to the legal heirs of Ashok Kumar Dabas within six weeks. The amount should also carry an interest rate of 6% per annum, starting from the date of resignation until the payment is made.
The ruling aligns with previous judgments that highlight the legal consequences of resignation in relation to pension entitlements. The case of BSES Yamuna Power Limited v. Ghanshyam Chand Sharma was referenced, which reinforced the legal distinction between resignation and voluntary retirement.
This Supreme Court decision holds significant value not only for employees but also for employers. It serves as a clear reference point on how pension entitlements are affected by resignation and voluntary retirement, as well as the legal obligations employers must adhere to regarding gratuity and leave encashment payments.
