High Court of Gujarat
CHIEF OFFICER, DHARAMPUR NAGAR PALIKAversusSTATE OF GUJARAT
- Disposal
- 26-DISMISSED @ ADM.STAGE
Holding
An employee of a municipality is entitled to pension if regular GPF contributions have been deducted, irrespective of whether the employee was originally appointed by the panchayat or directly by the municipality.
Summary
Four former employees of Dharampur Nagar Palika claimed pension benefits after reaching superannuation. The petitioners argued that, like earlier panchayat employees who were absorbed into the municipality, they were entitled to pension under the General Provident Fund (GPF) scheme. The Single Judge had directed that all four be granted pension, but the State Government refused to pay pension to the employee directly appointed by the municipality (respondent No.4), contending that the municipality should bear the liability. On appeal, the High Court examined precedent, notably Una Nagarpalika v. Kaliben Balubhai Makwana (2019) SCC and Chief Officer v. Irshad Husainbhai Baloch, which held that the source of appointment is irrelevant where regular GPF deductions have been made. The Court found that GPF contributions were deducted for respondent No.4 from 2006 to retirement, establishing his entitlement to pension. It held that the dispute over which authority pays the pension is between the State and the municipality and cannot defeat the employee's right. Consequently, the appeal was dismissed and the connected civil application disposed.
Issues considered
- What is the entitlement to pension for a municipal employee who was directly appointed by the municipality versus one absorbed from a panchayat?
- Does the existence of regular GPF deductions establish a right to pension irrespective of the appointing authority?
- Who bears the liability to pay the pension – the State or the municipality?
Subjects
PensionGeneral Provident FundMunicipal employeePanchayat conversionEntitlementHigh Court of GujaratAppeal
Judgment
C/LPA/206/2026 CAV JUDGMENT DATED: 17/07/2026
Reserved On : 04/05/2026
Pronounced On : 17/07/2026
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/LETTERS PATENT APPEAL NO. 206 of 2026
In R/SPECIAL CIVIL APPLICATION/3186/2021
With
CIVIL APPLICATION (FOR STAY) NO. 1 of 2026
In R/LETTERS PATENT APPEAL NO. 206 of 2026
==========================================================
CHIEF OFFICER, DHARAMPUR NAGAR PALIKA
Versus
STATE OF GUJARAT & ORS.
==========================================================
Appearance:
MR JAYRAJ CHAUHAN(2966) for the Appellant(s) No. 1
MS. KRISHNA DESAI, ASST. GOVERNMENT PLEADER for the
Respondent(s) No. 1,3
MRS KRISHNA G RAWAL(1315) for the Respondent(s) No. 4
==========================================================
CORAM:HONOURABLE MR.JUSTICE N.S.SANJAY GOWDA
and
HONOURABLE MR.JUSTICE J. L. ODEDRA
CAV JUDGMENT
(PER : HONOURABLE MR.JUSTICE N.S.SANJAY GOWDA)
1. Deepakbhai Vinayakbhai Desai (appointed on
16.03.1991), Bhayalbhai Jivanbhai Mahakal (appointed
on 01.03.1990), Rameshbhai Bhikhabhai Patel
(appointed on 01.01.1984), and Pradyumangiri
Vallabhgiri Goswami (appointed on 01.08.1994) had
filed writ petitions contending that their pensionary
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benefits had not been granted, despite them being
eligible.
2. The three of them, i.e., Deepakbhai Vinayakbhai
Desai, Bhayalbhai Jivanbhai Mahakal, and Rameshbhai
Bhikhabhai Patel, contended that they had been
appointed by the Gram Panchayat and, subsequently,
they were absorbed into service and, on the Panchayat
becoming a part of a Municipality, were treated as
Municipality employees and were being granted regular
pay scales from the date of the regularization. They,
however, contended that, on their attaining the age of
superannuation, despite requests to grant pension,
their claim was not granted.
3. As far as Pradyumangiri Vallabhgiri Goswami is
concerned, with which we are concerned in this
petition, though he made the same claim, the only
difference was that he had been appointed by the
Municipality, i.e., the concerned Nagarpalika, on
01.08.1994 after the Nagarpalika had been constituted
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on 14.04.1994.
4. In other words, Pradyumangiri Vallabhgiri
Goswami was appointed directly by the Municipality
and was not an erstwhile Gram Panchayat employee
like the other three, who were initially employees of the
Panchayath and had later on became employees of the
Municipality on the constitution of the Municipality and
absorption of the Panchayat in it.
5. The learned Single Judge, by the impugned order,
has come to the conclusion that their right to pension
cannot be denied by virtue of the judgment rendered by
the Hon’ble Apex Court in Una Nagarpalika versus
Kaliben Balubhai Makwana & Anr., reported in (2019)
12 SCC 340. This order included the right of
Pradyumungiri Vallabhgiri Goswami, i.e., respondent
No. 4, to pension.
6. The learned Single Judge accordingly directed the
respondents in the writ petition to consider the case of
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all the petitioners including the case of Pradyumungiri
Vallabhgiri Goswami as being eligible for grant of
pension and, while calculating the amount of pension,
they should also be granted the benefit of higher pay
scale considering the period of service rendered by
them. A timeline of six weeks was stipulated by the
learned Single Judge.
7. The Appellant-Nagarpalika accepted this order
and submitted a proposal to the Government for the
payment of pension to all the four petitioners, including
respondent No. 4 herein. The State Government, on
consideration of the proposal, has granted permission
for payment of pension to the other three petitioners,
but, in so far as respondent No. 4 was concerned, it
took the view that, since he had been appointed after
the constitution of the Nagarpalika, the Nagarpalika
should pay the pension out of its own funds.
8. The State appears to have taken the view that
only the erstwhile employees of the Panchayat, who,
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after conversion into a Nagarpalika, were the employees
who were entitled to claim the benefits under the
Government Provident Fund/pension scheme, which
was applicable to Panchayat employees. The State
appears to have taken this stand, in so far as the
Nagarpalika employee is concerned, on the premise they
were covered under the Contributory Provident Fund
and, therefore, respondent No. 4 herein would not be
entitled to pension.
9. The Nagarpalika, after the Government refused
the proposal, filed a review before the learned single
judge, being MCA No. 98/2026, but the same has also
been dismissed by the learned Single Judge.
10. As a consequence, the Nagarpalika has preferred
this appeal challenging the order of the learned Single
Judge, in so far as it relates to the direction to extend
the pensionary benefits to respondent No. 4 herein.
11. The Nagarpalika seeks to contend that
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respondent No. 4 had been appointed by the
Nagarpalika after it had been constituted, and therefore
respondent No. 4 was not entitled to pension. It seeks to
contend that the employees under the Panchayats were
entitled to a pension, and this entitlement of theirs was
recognized even after the Panchayat was converted into
a Municipality. It is contended that the judgment
rendered by this Court, in relation to panchayat
employees, as confirmed by the Hon’ble Supreme Court,
is on the basis, that those of whom who were initially
Panchayat employees were entitled to pension by virtue
of them initially being Panchayat employees and were
therefore entitled to pension even after they became
employees of the Nagarapalika.
12. The question of entitlement of pensionary benefits
to the erstwhile Panchayat employees on the
Panchayats being converted into Municipalities, and
also the entitlement of the Municipality employees, has
been considered by this Court and also by the Hon’ble
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Apex Court.
13. In the case of Chief Officer versus Muhammad
Irshad Husainbhai Baloch, reported in 2011 (0) AIJEL-
HC 224820, the Division Bench, while considering the
case of the entitlement of a daily-wager who had been
employed with the Panchayat and who was later
absorbed in the Municipality, has held that he would be
entitled to pension. In this judgment, the Division
Bench took note of the fact that, if there had been
regular deduction of contribution to the GPF account in
respect of an employee and this deduction continued till
the age of superannuation, that, by itself, would be
sufficient to hold that an employee would be entitled to
pensionary benefits.
14. This judgment rendered by the Division Bench
was challenged before the Hon’ble Supreme Court in
SLP No. 15691-15700/2013, but the same was
dismissed, thereby confirming the view of the earlier
Division Bench that an employee of a Panchayat, on its
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conversion to a Municipality, would be entitled to
pension so long as it was shown that there had been
regular deduction of GPF.
15. In the year 2014, five employees of the Una
Nagarpalika filed writ petitions before this Court
seeking payment of pension and pensionary benefits. A
learned Single Judge of this Court passed separate
orders and allowed the petitions after holding that the
petitioners therein were eligible to claim pension and
pensionary benefits by virtue of them being employees
of the Municipality.
16. The Municipality challenged this order of the
learned Single Judge by filing an appeal. The Division
Bench, however, dismissed the appeals, and, as a
consequence, Una Nagarpalika preferred a Special
Leave Petition to the Hon’ble Supreme Court. The
Hon’ble Supreme Court, in the case of Una Nagarpalika
versus Kaliben Balubhai Makwana & Anr., reported in
(2019) 12 SCC 340, while approving the earlier Division
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Bench ruling rendered in Chief Officer versus Mohmad
Irshad Husenbhai Baloch and its affirmation by the
Hon’ble Supreme Court in Civil Appeal No. 5529/2016,
has held as follows:
19) The Division Bench while repelling the
aforementioned submission took note of the following
four undisputed facts arising in this case:
“1. The original petitioners-respondent No.1 herein in
the respective appeals were appointed by the
municipality and they were in service of the
municipality.
2. After the appointment, the employee concerned
continued in service until he reached to the age of
superannuation, so far as LPA No.1066/15 is
concerned. Whereas, in the rest of the Letters Patent
Appeals, the services of the employees concerned
came to an end on account of death of the
employees.
3. It is an undisputed position that the total length of
service in respect of all cases has exceeded 10 years
which is the minimum requirement for eligibility of
pension.
4. In respect of all employees, which is subject
matter of the present group of appeals, they were
member of GPF and GPF contributions were being
deducted by the municipality from their salary from
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time to time until their services came to an end.”
20) The Division Bench was of the view and, in our view,
rightly that the distinction sought to be made between
the two groups of employees, namely, one coming from
the Panchayat and then becoming the Municipal
employees and the other directly becoming the Municipal
employees was held to be of no significance because the
appellant made the respondents members of the GPF
contributions and went on to deduct regular contribution
from their salary till the date of their retirement.
21) In our view, the case at hand is covered by the earlier
decision rendered in the case of Chief Officer vs.
Mohamed Irshad Husenbhai Baloch and Others (supra)
which stands upheld by this Court by order dated
16.09.2013. We are also of the view that the
aforementioned distinction pointed out by the appellant
for coming out of the clutches of the decision of Chief
Officer vs. Mohamed Irshad Husenbhai Baloch and
Others (supra) was also rightly found untenable by the
High Court by assigning the proper reasons.
17. As could be seen from the above judgment, the
Hon’ble Supreme Court categorically took note of the
fact that the Division Bench was right in holding that
there can be no distinction made between the
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employees of the Panchayat, who became subsequently
employees of the Municipality, and the employees who
had been directly appointed by the Municipality and
were therefore Municipal Employees from the very
beginning.
18. The Hon’ble Supreme Court has held the
difference in initial appointment i.e., either by the
Panchayat or by the Municipality would be of no
significance, only because the Nagarpalika had made
the employees subject to GPF deductions from their
salary till they retired.
19. In other words, right from the first decision in
Chief Officer versus Mohmad Irshad Husenbhai Baloch
to the judgment granted by the Hon’ble Supreme Court
in Una Nagarpalika (supra), the law consistently
declared is that, if a Municipality were to deduct GPF
contributions from its employees, they would be entitled
to pension.
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20. In the present case, though the Appellant
Municipality accepted the judgment of the Trial Court
and, in fact, submitted a proposal to the Government
for payment of pension to the respondent No. 4, it has
subsequently filed this appeal, when the State took up
the stand that an employee appointed by the
Municipality would be its responsibility in so far as it
related to the payment of pension.
21. As noticed above, the primary criteria to
determine the entitlement of pension, in the light of the
judgment of the earlier division and Chief Officer versus
Mohmad Irshad Husenbhai Baloch (Supra) to the
judgment granted by the Hon’ble Supreme Court in Una
Nagarpalika (supra) by the Hon’ble Supreme Court, is to
examine whether there had been GPF deductions from
the employee.
22. In the instant case, the respondent No. 4 has
produced the following documents as Annexure-B and
C. A true translation of the same reads as follows.
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C/LPA/206/2026 CAV JUDGMENT DATED: 17/07/2026
DHARAMPUR MUNICIPALITY
Dharampur, Dist. Valsad. Pin Code: 396 050.
Phone Number: 02633-242035 / 242530
Fax Number: 02633-242707
E-Mail: np_dharampur@yahoo.co.in
-------------------------------------------------------------------------------------
:: CERTIFICATE ::
This is to certify that Mr. Pradhyumangiri Vallabhgiri
Goswami, a retired employee of Dharampur Municipality,
held the designation of Wireman. His date of joining service
at the Dharampur Municipality office was 15/12/2004, and
his date of retirement was 30/04/2019. The deduction for
the General Provident Fund (GPF) from his salary by the
Dharampur Municipality office commenced on 01/01/2006.
This fact is true and correct, in witness whereof this
certificate is issued.
Sd/- (Illegible)
Chief Officer
Dharampur Municipality
No. MUN/Outward No./2249/2020
Dharampur Municipality
Date: 31 / 03 / 2020
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C/LPA/206/2026 CAV JUDGMENT DATED: 17/07/2026
DHARAMPUR MUNICIPALITY
Dharampur, Dist. Valsad. Pin Code: 396 050.
Phone Number: (02633) 242035 / 242530
E-Mail: np_dharampur@yahoo.co.in
-------------------------------------------------------------------------------------
Date: 10/4/2006
:: General Provident Fund (GPF) Annual Savings
Statement ::
Subscriber/Employee Name: Pradhyumangiri Vallabhgiri
Goswami
Designation: Wireman
Account Number: 64
Year: 2005-06 (from January 2006)
Rate of Interest: 8%
Sr. Amount
Particulars
No. (Rs.)
1 Opening Balance (Rs.) 0000
Amount credited from employee's
2 1500
salary during the year (Rs.)
Interest credited by the Government
3 33
during the year (Rs.)
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4 Total Credited Amount (Rs.) 1533
Withdrawal amount made by the
5 0
employee during the year (Rs.)
Closing Balance at the end of the
6 1573
year (Rs.)
Notes:
1. Does the subscriber wish to make any changes to the
nomination made under Rule-5?
2. In case the subscriber had not made any nomination in
favor of their family members under the proviso (a) to sub-rule
(1) of Rule-5, has they since acquired a family?
3. The subscriber must verify the correctness of the annual
savings statement and bring any errors to the attention of the
Accountant within three months from the date of receipt of
this statement.
4. If any change is to be made to the nomination, the
nomination form must be filled out and submitted to the office
immediately.
Sd/- (Illegible)
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Accounts Officer
Accountant
Dharampur Municipality
--------------------------------------------------------------------------------------
I have verified the closing balance shown in my General
Provident Fund (GPF) statement for the year ............. in my
GPF Account Number ............. maintained at this office since
Date: ..../..../....... and have found it to be correct. I hereby
confirm the same to the best of my knowledge and
understanding. A change/alteration as per Note Column-1
and Column-2 is required / not required.
Account Number: _______________
23. As could be seen from the above, the Appellant
Nagarpalika acknowledges the fact that it did deduct
GPF contributions from the salary of the respondent No.
4, and this continued throughout the service of the
respondent No. 4. This would, by itself, in the
background of the law declared in the judgment referred
to above, would entitle the respondent No. 4 to the
grant of pension and pensionary benefits.
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24. The State, which has filed its written
submissions, acknowledges that deductions were made
from the salary of the respondent No. 4, but the
deductions were made under the Major Head – Civil
Deposits, and the respondent No. 4 had not opted for
the pension scheme, and, as such, the respondent No. 4
would not be entitled to pension.
25. It is to be stated here that, if a deduction is made
towards the GPF, as could be seen from the
acknowledgment made by the Nagarpalika above, the
head of the deposit that money is credited would not be
of any significance and, in any event, beyond the control
of an employee such as the respondent No. 4. The
respondent No. 4, being an employee, would only know
that the amounts have been deducted from his salary
towards GPF, and, if this deduction is not remitted to
the same account, credited to the appropriate account,
he cannot be denied the benefit of pension.
26. It is to be reiterated here that the fact that
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deductions are made from the GPF is not in dispute and
it is admitted both by the Nagarpalika as well as by the
State, and, therefore, it is clear that the entitlement of
the respondent No. 4 for pension cannot be denied.
27. Arguments are also sought to be advanced by the
Nagarpalika and the government, by which they are
basically trying to cast the liability to pay pension on
each other. The entity which is required to pay pension
would not really be germane in so far as the respondent
No. 4 is concerned. If the respondent No. 4 has
deducted contributions towards GPF, it may probably
become liable to pay the pension. But this dispute in
between the Municipality and the State regarding the
liability to bear the burden of paying the pension cannot
be a ground to deny the benefit of pension to an
employee, such as the respondent No. 4.
28. It would be open for the Nagarpalika to inform the
State that it was making the deposit, maybe under a
wrong head, but that should not result in a liability
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being cast on it. It would be open for the State to accept
this, and thereby, also assume the responsibility to pay
the pension.
29. Be that as it may, this issue would have to be
resolved by the State and the Municipality amongst
themselves and, in an event, the dispute regarding the
liability to pay pension amongst themselves cannot be a
ground to deny the pensionary benefits to the
petitioner.
30. The learned Single Judge has merely relied upon
the earlier decision of the Division Bench in LPA No.
1067/2015 and, more importantly, the decision of the
Hon’ble Supreme Court in Una Nagar Palika (supra), in
which it has been clearly held that there cannot be any
distinction between the Panchayat Employee and
Municipality Employee, and pension will have to be paid
if a deduction has been made from the salary towards
the GPF.
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31. Consequently, the writ appeal is dismissed.
Accordingly, the connected Civil Application is also
disposed of.
(N.S.SANJAY GOWDA,J)
(J. L. ODEDRA, J)
Mehul Desai
Original copy of this order has been signed by the Hon'ble Judges.
Digitally signed by: MEHULKUMAR BHIMABHAI DESAI(HCD0075), ENGLISH STENOGRAPHER GRADE TWO CLASS TWO, at High Court of Gujarat on 17/07/2026 17:56:40
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