Qualifying Service Criteria in Pension Scheme: Supreme Court’s Verdict

Explore the recent Supreme Court judgment on the criteria for qualifying service in the Pension Scheme, highlighting the implications for employee benefits. The case delves into the computation of qualifying service for pension eligibility under the Corporation’s rules introduced in March 1993. Stay informed on the key considerations shaping pension entitlements in the workforce.


  • All existing and retired employees have the option to choose between the Pension Scheme or the Employees Contributory Provident Fund within 30 days from the issue date of the Office Order.
  • New employees joining DTC from 23.11.92 onwards are mandated to be part of the Pension Scheme.
  • The Pension Scheme will be managed by LIC on behalf of DTC.
  • Employees opting for the Pension Scheme will have their EPF account transferred to LIC for operation.
  • Retired employees and existing employees who withdrew the employer’s share under EPF Act must refund the amount with interest if opting for the Pension Scheme.
  • Those who have received excess gratuity not applicable under the Pension Scheme must refund it before receiving any benefits.
  • The date of effect of the Pension Scheme is 3.8.1981.

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  • The appellant submitted an application for voluntary retirement after crossing 40 years of age.
  • The appellant emphasized the computation of qualifying service to be eligible for pension under the scheme of rules introduced by the Corporation in March 1993.
  • The appellant’s total qualifying service, including training and other service periods, was calculated to be around 10 years.
  • A larger bench was awaiting a decision regarding the treatment of 98 days of leave without pay in determining qualifying service.
  • A three-Judge Bench decision in February 2019 clarified that only leave periods with salary paid would count towards pensionable service.
  • The Pension Rules were deemed applicable to those opting for voluntary retirement, making pension benefits contingent on specific qualifying service criteria.
  • Existing employees were required to make a choice regarding their pension scheme preference, with silence being treated as opting for the pension scheme.
  • The appellant’s total qualifying service, even considering training periods, fell short of the minimum required for pension eligibility.
  • The Corporation’s computation of the appellant’s qualifying service also concluded that he did not meet the pension eligibility criteria.
  • The appellant’s service break-up indicated that certain periods were for qualification purposes rather than actual service.
  • The proposed voluntary Retirement Scheme by the Corporation was under consideration during the proceedings.
  • Different calculations of the appellant’s service period were presented by both parties, resulting in discrepancies in determining pension eligibility.
  • The appellant failed to qualify with the minimum qualifying service of 10 years for pension entitlement.
  • The High Court upheld the requirement of 10 years qualifying service as per the pension Scheme, 1993.
  • The principle of literal construction was applied due to clear and unambiguous wording of the statute.
  • The appellant’s service on duty or otherwise was found insufficient for pension eligibility.
  • The appeal was dismissed based on the above considerations.

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  • The RPC argued that the evaluation criteria were not clearly specified in the tender documents.
  • They also contended that the scoring mechanism was arbitrary and lacked transparency.
  • Additionally, the RPC highlighted instances where certain bidders were given preferential treatment over others.
  • The RPC further raised concerns about the lack of adherence to procurement regulations during the tender process.

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Case Number: C.A. No.-012743-012743 / 2017

Click here to read/download original judgement

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