Holding

Rule 17 applies to employees regularised after contractual service, and therefore the contractual period must be counted for pensionary benefits.

Summary

The appellants were appointed as Data Entry Operators on a contractual basis between 1996 and 1999 and were regularised in 2015. They sought to have their contractual service counted for pension benefits under the Central Civil Services (Pension) Rules, 1972. The Central Administrative Tribunal and the Karnataka High Court gave conflicting rulings, with the High Court refusing to count the contractual period for pension. The Supreme Court examined Rule 17 of the Pension Rules and the precedent set in State of H.P. v. Sheela Devi, holding that once a contractual employee is regularised, Rule 17 mandates that the prior contractual service be counted for pension calculations. Accordingly, the Court partially allowed the appeals, set aside the High Court order to the extent indicated, and directed the Union of India to facilitate the appellants' exercise of the option under Rule 17.

Issues considered

Whether the period of service rendered on a contractual basis prior to regularisation in 2015 should be counted towards pensionary benefits under Rule 17 of the Central Civil Services (Pension) Rules, 1972.

Legislation cited

Central Civil Services (Pension) Rules, 1972s. Rule 17, s. Rule 2(g)

Headnote

Issue for Consideration Whether the contractual service rendered prior to the appellants’ regularisation in 2015 ought to be counted towards the payment of their pensionary benefits in accordance with r.17, Central Civil Services (Pension) Rules, 1972. Headnotes† (Pension) Rules, 1972 – rr.17, 2(g) – Counting of service on contract – Appellants initially appointed on contractual basis and subsequently regularised – Period of contractual service prior to regularisation, if to be counted for grant of pension: Held: Yes – r.17

Subjects

Contractual employeesRegularisationPeriod of contractual service to be counted for pensionContractual service period prior to regularisationPayment of pensionary benefitsConsequential benefitsSeniorityService benefitsPensionData Entry OperatorsRationalisation of Data Processing Facilities

Judgment

[2025] 4 S.C.R. 1976 : 2025 INSC 594

S.D. Jayaprakash and Ors. Etc.
v.
The Union of India & Ors.
(Civil Appeal No(s). 5671-5672 of 2025)
29 April 2025
[Pamidighantam Sri Narasimha* and Joymalya Bagchi, JJ.]

Issue for Consideration
Whether the contractual service rendered prior to the appellants’
regularisation in 2015 ought to be counted towards the payment
of their pensionary benefits in accordance with r.17, Central Civil
Services (Pension) Rules, 1972.

Headnotes†
Central Civil Services (Pension) Rules, 1972 – rr.17, 2(g) –
Counting of service on contract – Appellants initially appointed
on contractual basis and subsequently regularised – Period
of contractual service prior to regularisation, if to be counted
for grant of pension:
Held: Yes – r.17 deals with counting of service on contract for the
purpose of granting pension – Interpreting r.17 in Sheela Devi, this
Court held that although r.2(g) excludes contractual employees from
their application, r.17 applies once such contractual employee is
regularised on a later date – Thus, upon regularisation, the Pension
Rules become applicable and r.17 requires that past service as a
contractual employee is to be taken into account for calculating
pension – Therefore, the contractual service period rendered prior
to the appellants’ regularisation in 2015 must be counted towards
the payment of their pensionary benefits in accordance with r.17.
[Paras 7-9]

Case Law Cited
State of H.P. v. Sheela Devi, 2023 SCC OnLine SC 1272 – relied
on.

List of Acts
Central Civil Services (Pension) Rules, 1972.

* Author
[2025] 4 S.C.R. 1977

S.D. Jayaprakash and Ors. Etc. v. The Union of India & Ors.

List of Keywords
Contractual employees; Regularisation; Period of contractual
service to be counted for pension; Contractual service period prior
to regularisation; Payment of pensionary benefits; Consequential
benefits; Seniority, Service benefits; Pension; Data Entry Operators;
Plan Scheme called ‘Rationalisation of Data Processing Facilities’
on temporary and contractual basis between 1996 and 1999; Data
Entry Operators; Grant of pension.

Case Arising From
CIVIL APPELLATE JURISDICTION: Civil Appeal No(s). 5671-5672
of 2025
From the Judgment and Order dated 23.03.2021 of the High Court
of Karnataka at Bengaluru in WP Nos. 4712 and 4714 of 2016

Appearances for Parties
Advs. for the Appellants:
M.C. Dhingra, Sr. Adv., C.B.Gururaj, Prakash Ranjan Nayak,
Animesh Dubey, Gaurav Dhingra, Shashank Singh, Surendra
Gautam, Lalit Nagar.
Advs. for the Respondents:
K.M. Nataraj, A.S.G., Vatsal Joshi, Sharath Nambiar, Mohd. Akhil,
Raghav Sharma, Prashant Rawat, Kritagya Kait, Ms. Kritagya Kait,
Dr. N. Visakamurthy, Gurmeet Singh Makker.

Judgment / Order of the Supreme Court

Judgment

Pamidighantam Sri Narasimha, J.

1. Leave granted.
2. These appeals arise from the Karnataka High Court’s order dated
23.03.20211 by which it held that the appellants, who were initially
appointed on contractual basis and subsequently regularised, will not
be entitled to seniority, service benefits, and pension for the period

1 In W.P. No. 4712/2016 (S-CAT) c/w W.P. No. 4714/2016 (S-CAT).
1978 [2025] 4 S.C.R.

Supreme Court Reports

of their contractual service. Upon consideration of the relevant rules
and the decision of this Court in State of H.P. v. Sheela Devi,2 we
have partly allowed the present appeals and directed the respondent,
i.e., Union of India to grant pensionary benefit to the appellants in
accordance with law.
3. The short facts that are necessary are as follows. The appellants
were appointed as Data Entry Operators under the Plan Scheme
called ‘Rationalisation of Data Processing Facilities’ on temporary and
contractual basis between 1996 and 1999. Pursuant to an order of the
Central Administrative Tribunal3 dated 01.04.2013,4 the respondents
issued an Office Memorandum dated 05.01.2015 to regularise the
appellants’ service from a prospective date, i.e., from the date of
issuance of this order. Pursuantly, the appellants were appointed on
a regular basis by order dated 01.04.2015, w.e.f. 05.01.2015. The
appellants preferred an Original Application before the CAT, with a
prayer to regularise their services from the date of initial appointment
or at least from the date of completing 10 years of service, and to
protect their pay and to grant seniority, service benefits and pension
by counting their period of contractual service. The CAT allowed the
same by order dated 19.01.2016 and directed as follows:
“31. Therefore, after considering the entire facts and
circumstances of the case, we order as follows:
1. The pay and other allowances drawn by the applicants
prior to their appointment on regular basis on 1.4.2015
shall be protected and they shall be allowed the pay being
drawn by them immediately prior to their regularisation as
their basic pay as on 1.4.2015. Their annual increment
shall be determined accordingly.
2. The applicants from whose salary, the GPF and other
contributions made right from the date of their appointment
on contract basis shall be entitled to come under the old
pension scheme and the entire period of service right from
the date of initial appointment on contract basis shall be
counted towards pensionary benefits.

2 2023 SCC OnLine SC 1272.
3 Hereinafter “CAT”.
4 In O.A. No. 339/2011 before CAT, Bangalore. The High Court upheld the same in W.P. Nos. 57381/2013
(S-CAT) and connected matters by order dated 22.04.2014.
[2025] 4 S.C.R. 1979

S.D. Jayaprakash and Ors. Etc. v. The Union of India & Ors.

3. For the purpose of seniority, ACP and other service
benefits etc., the regular service of the applicants shall
be reckoned from the date of completion of 10 years of
service from their initial appointments on contract basis.
32. The Respondents are directed to fix the salary of the
applicants and grant the consequential benefits in terms
of the above direction within a period of two (2) months
from the date of receipt of a copy of this order.”
4. The respondents challenged the above order by way of a writ
petition, which was partly allowed by the impugned order. The High
Court set aside the CAT’s directions to the extent of counting the
period of contractual service for grant of seniority, service benefits,
and pension on the ground that the initial appointment was on a
contractual basis and not pursuant to the recommendation of the Staff
Selection Commission. It held that the appellants will be entitled to
regularisation and its consequential benefits only from 01.04.2015.
However, the Court upheld the CAT’s direction regarding protection
of pay while fixing the pay scale.
5. We have heard Mr. MC Dhingra, learned senior counsel for the
appellants. He relied on this Court’s decision in Sheela Devi (supra)
to contend that as per Rule 17 of the Central Civil Services (Pension)
Rules, 1972,5 the appellants would be entitled to pensionary benefits
by including the period of contractual service. On the other hand,
Mr. Vatsal Joshi, learned counsel for the respondents has sought to
differentiate Sheela Devi (supra) only on the ground that the initial
appointment in this case was not against sanctioned posts.
6. Before commencing our analysis, it is necessary to note the scope of
prayers made before the CAT and High Court, and before this Court.
The prayer before the CAT is for regularisation with retrospective
effect, protection of pay, and grant of seniority and service and pension
benefits by counting the period of contractual service. Pursuant to the
High Court’s impugned order dated 23.03.2021, only the appellants’
pay has been protected while their prayers for seniority, service
and pension benefits by including the contractual period have been
rejected. The submissions before this Court have been limited to

5 Hereinafter “Pension Rules”.
1980 [2025] 4 S.C.R.

Supreme Court Reports

the grant of pensionary benefits by including the contractual period,
through reliance on the decision in Sheela Devi (supra). The issues
relating to grant of retrospective regularisation, seniority and service
benefits during the contractual period have not been argued before
us. We are therefore confining ourselves to the issue of pension.
7. Rule 17 of the Pension Rules deals with counting of service on
contract for the purpose of granting pension, which squarely covers
the issue in the present case. It is extracted below for ready reference:
“17. Counting of service on contract -
(1) A person who is initially engaged by the Government
on a contract for a specified period and is subsequently
appointed to the same or another post in a substantive
capacity in a pensionable establishment without interruption
of duty, may opt either :-
(a) to retain the Government contribution in the
Contributory Provident Fund with interest thereon
including any other compensation for that service; or
(b) to agree to refund to the Government the monetary
benefits referred to in Clause (a) or to forgo the same
if they have not been paid to him and count in lieu
thereof the service for which the aforesaid monetary
benefits may have been payable.
(2) The option under sub-rule (1) shall be communicated to
the Head of Office under intimation to the Accounts Officer
within a period of three months from the date of issue of
the order of permanent transfer to pensionable service, or
if the Government servant is on leave on that day, within
three months of his return from leave, whichever is later.
(3) If no communication is received by the Head of Office
within the period referred to in sub-rule (2), the Government
servant shall be deemed to have opted for the retention of
the monetary benefits payable or paid to him on account
of service rendered on contract.”
8. This rule fell for consideration and interpretation in Sheela Devi
(supra), where this Court held that although Rule 2(g) of the Pension
Rules excludes contractual employees from their application, Rule 17
[2025] 4 S.C.R. 1981

S.D. Jayaprakash and Ors. Etc. v. The Union of India & Ors.

applies once such contractual employee is regularised on a later date.
The effect is that upon regularisation, the Pension Rules become
applicable and Rule 17 requires that past service as a contractual
employee is to be taken into account for calculating pension.6 In this
light, and considering that Rule 17 requires the regularised employee
to exercise an option to either retain the Government’s contribution
to Contributory Provident Fund, or to refund such amount or forgo
the same if they have not been paid in lieu of counting the service
period for which such benefits may have been payable, this Court
in Sheela Devi (supra) issued the following directions:
“11. In view of the above reasoning, this court is of the
opinion that there is no merit in the appeal however, the
following directions are issued:-
(i) The state shall take immediate steps to indicate
the mode and manner of exercising option by all the
employees concerned (who had been regularized after
spells of contractual employment) regardless of the dates
on which they were engaged i.e. prior to the year 2003 or
subsequently, within a time frame, of within eight weeks
from today.
(ii) After receiving the options within the time indicated in
the notice, the concerned employee(s) who exercise the
relevant options should be notified about the amounts
they would have to remit in case any amount towards
contribution is required, clearly.
(iii) The options should be processed and completed within
eight weeks from the last date of receiving options.
(iv) Time limit for payment too should be indicated and
entire process should be completed within four months
and all orders fixing pensions or family pension as the
case may be, shall be issued.”
9. In light of the clear language of Rule 17 of the Pension Rules as well
as its interpretation in Sheela Devi (supra), the contractual service
period rendered prior to the appellants’ regularisation in 2015 must

6 Sheela Devi (supra), para 9.
1982 [2025] 4 S.C.R.

Supreme Court Reports

be counted towards the payment of their pensionary benefits in
accordance with the mechanism set out in Rule 17. In line with the
directions issued in Sheela Devi (supra) extracted hereinabove, we
direct the respondent Union of India to take immediate steps and
indicate the mode and manner for the appellants to exercise the
option provided under Rule 17 of the Pension Rules as well as to
notify the amounts that the appellants would have to remit in case
they opt for grant of pension under the Rules.
10. With the above reasoning and directions, we partly allow the present
appeals arising from SLP (C) Nos. 19539-19540/2021 and set aside
the impugned order of the High Court dated 23.03.2021 in W.P.
No. 4712/2016 (S-CAT) c/w W.P. No. 4714/2016 (S-CAT) to the
extent indicated hereinabove.
11. No order as to costs.
12. IA Diary No. 44115/2025 for bringing on record LRs of appellant
no. 21 is allowed. Pending applications, if any, stand disposed of.

Result of the case: Appeals partly allowed.

†
Headnotes prepared by: Divya Pandey