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Supreme Court of India

GULAB CHAND AGRAWALversusSTATE OF BIHAR AND ORS.

Citation
2006 INSC 928
Decided
29 November 2006
Disposal
Dismissed

Holding

A retired employee cannot exercise the option to switch to the pension scheme under Rule 4 when the pension rules were adopted after his retirement; thus the appellant’s claim is barred.

Summary

Gulab Chand Agrawal, a clerk employed by Siwan Municipality, retired on 31 January 1992. The Bihar Municipal Officers and Servants Pension Rules, 1987 (Rule 4) allowed municipal employees who were on the rolls at the time of the rule’s confirmation and who had subscribed to the Contributory Provident Fund to switch to a pension scheme by submitting a written option within 90 days of the rule’s framing. The municipality adopted these pension rules only in August 2001, long after the appellant’s retirement, and he did not submit any option. Agrawal filed a writ petition seeking to be permitted to exercise the option; the Patna High Court dismissed the petition on the ground that he had not exercised the option. On appeal, the Supreme Court held that because Agrawal had retired in 1992, the opportunity to opt for the pension scheme could not arise after the rules were adopted in 2001, and therefore his claim was barred. The Court, however, noted that any pending retirement dues must be paid by the municipality, which is a ‘State’ within the meaning of Article 12 of the Constitution.

Issues considered

  • Whether a municipal employee who retired before the adoption of the Bihar Municipal Officers and Servants Pension Rules, 1987 can exercise the option under Rule 4 to switch from the Contributory Provident Fund to the pension scheme.
  • Whether the municipality, as a ‘State’ under Article 12, is liable to pay any outstanding retirement dues to the appellant.

Subjects

pension schemecontributory provident fundmunicipal employeesretirementoption to switchArticle 12state liabilityservice law

Judgment

                       GULAB CHAND AGRAWAL                                      A
                                     v.
                       STATE OF BIHAR AND ORS.

                           NOVEMBER 29, 2006

               [S.B. SINHA AND MARKANDEY KA TJU, JJ.]                           B


      Service Law:

      Pension-Rules provided option to Municipal employees, who had             C
subscribed to Contributory Provident Fund, to switch over to Pension Scheme
under the Rules-Rules adopted by employer-Municipality in 2001-Entitlement
of Appellant-employee to exercise option under the Rules-Held, not entitled
as he had already retired in 1992-Grant of opportunity to him to exercise the
option does not and cannot arise-Bihar Municipal Officers and Servants
Pension.Rules, 1987-Rule 4-Bihar and Orissa Municipalities Act, 1922.           D
      Appellant was appointed as a clerk in Respondent No.4-Municipality,
a 'local authority' constituted under the Bihar and Orissa Municipalities
Act, 1922. He retired from service in 1992. Rule 4 of the Bihar Municipal
Officers and Servants Pension Rules, 1987 gave Municipal employees, on          E
roll on the date of confirmation of such Rules, and who had subscribed to
Contributory Provident Fund under the Provident Fund Rules, the option
of switching over to Pension Scheme under the Pension Rules. The option
was to be exercised in writing. The Pension Rules were adopted by the
Respondent-Municipality in 2001.
                                                                                F
     Writ application of Appellant was dismissed by High Court on the
ground that he did not give any option for switching over to Pension
Scheme under the Pension Rules from the Contributory Provident Fund
Scheme of which he was a member.
                                                                                G
      In appeal to this ·court it was submitted by the Appellant that the
question of giving any option in terms of the Rule 4 of the Pension Rules
did not arise as the same had been adopted by Respondent No.4-
Municipality only in 2001.

        Dismissing the appeal, the Court                                        H
                                    849
    850                        SUPREME COURT REPORTS [2006] SUPP. 9 S.C.R.

A         HELD: 1. Although the appellant may be correct in his submission but
    the fact remains that he had already retired in 1992 and as such at this
    juncture, the respondent No.4 - Municipality's giving him opportunity to opt
    for the said scheme does not and cannot arise. Therefore, albeit for different
    reasons, the judgment and order passed by th~ High Court is upheld.

B         2. However, it is stated at the Bar that the entire retirement dues of the
    appellant has not been paid. If that be so, the respondent No.4 being a 'State'
    within the meaning of Article 12 of the Constitution, shall pay all lawful dues
    of the appellant at an early date. (851-E-Fj

C         CIVIL APPELLATE JURISDICTION: Civl Appeal No. 2730 of2006.

          From the Judgment and Order dated 16- l 0-2003 of the High Court of
    Judicature at Patna in L.P.A. No. 972 of 2003.

          Rajesh Pathak, Sumeet Kumar and Amit Kumar for the Appellant.
D
          Gopal Singh for the Respondents.

          The Judgment of the Court was delivered by

          S.B. SINHA, J. Leave granted.
E
          This appeal is directed against the judgment and order dated 16. l 0.2003
    passed by a Division Bench of the Patna High Court in LPA No. 972/2003,
    whereby and where under a judgment and order dated 11.9.2003 passed by
    a learned Single Judge of the said Court passed in CWJC No. 707/2000 was
    affirmed the appellant herein was appointed as a clerk in Siwan Municipality.
F   The said Municipality is a 'local authority' constituted in terms of the provisions
    of the Bihar and Orissa Municipalities Act, l.922.

         The State of Bihar framed rules for the Municipal employees, known
    as Bihar Municipal officers and Servants Pension Rules, 1987. Clause 1 if
G   Rule 4 of the· said rules reads as follow:

            "Municipal employees on roll on the date of confirmation of this rule
            and who had subscribed to the contributory provident fund under
            provident fund rules and want to be governed by these rules shall
            have the option to do so and such option shall be exercised in writing
H           in the prescribed Form (Annexure-1) and submitted to their head office
            within 90 days from the date of framing of this rule by the State
      GULAB CHAND AGRAWAL v. STATE OF BIHAR [S.B. SINHA, J.]               851
         Government. If such option in writing prescribed form is not received     A
         within the period so fixed it will be deemed that they would retain the
         existing contributory provident fund."

      Appellant retired from his service on 31.1.1992. The aforesaid rules
were adopted by the respondent-Municipality in August, 2001. As Appellant
did not give any option for switching over to the pension scheme under the         B
aforesaid rules from the contributory provident fund scheme of which he was
a member, the High Court dismissed his writ application.

      Learned counsel appearing on behalf of the appellant submits that the
question of giving any option in terms of the Rule 4 of the Pension Rules did
not arise as the same had been adopted by respondent NO. 4 - Municipality          C
only in August, 2001.

     Although the learned counsel may be correct in his submission but fact
remains that he had already retired in 1992 and as such, at this juncture, the
respondent No. 4 - Municipality's giving him opportunity to opt for the said       D
scheme does not and cannot arise. We, therefore, albeit for different reasons,
uphold the judgment and order passed by the High Court.

      However, it is stated at the Bar that the entire retirement dues of the
appellant has not been paid. If that be so, we are sure that the respondent No.
4 being a 'State' within the meaning of Article 12 of the Constitution, shall      E
pay all lawful dues of the appellant at an early date.

      The <!ppeal is dismissed with the aforesaid observations.

B.B.B.                                                       Appeal dismissed


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